[RCT]

Originally Posted by Lauren Ritchie

Hello Villagers,

I'm Lauren Ritchie, the Sentinel columnist who wrote the 3/1 column about the Villages and the IRS. I've been reading your notes about how my columns are "slanted."

Yes, they are. They are supposed to be slanted. That's what the Sentinel pays me to do. I am not a news reporter. Those folks are paid to get all sides of the story and lay it before you without comment.

I'm a columnist, which means that I write opinion. I'm paid to research, form an opinion and write it in a way that convinces readers. I DO have an opinion about this IRS investigation and about the way that the developer has used the community development districts to his benefit -- at terrible expense and liability to Villages residents. Do you realize, for example, that the outstanding bond debt on each of your homes is roughly $18,000? I wonder whether you would have bought your place if that had been tacked onto the purchase price up front? And, in addition, that $18K is the face value. Over the life of the bonds, homeowners will pay another $18K-$20K in interest. (Consider that the amortization schedule of the $64 million in bonds the IRS is investigating is about $134.5 million over the life of the bond.)

I have a second column about the IRS investigation that is to be published on Wednesday. If you don't get the paper, you can access the column online at www.orlandosentinel.com/lake and look for my picture with a list of columns by it.

In any event, I hope this helps you understand what I do. Regardless, the real question here is about the validity of the bonds, not what anyone might write about them.

Lauren

The thing you are not stating is, that in most other communities, these fees ARE included in the price of the home. Impact fees for infrastructure ARE a reality that almost every developer has to pay the city, town, state, etc. where they are. There is NO way around this, the only question is wether it is totaled in the price of the home, or separated, as TV's chose to do. Now, the interest is alot, IF you choose to do it this way, if you pay it right away, then of course, that interest isn't a factor. I respect what you say about you are a columnist, but get ALL the facts, please, BEFORE you make YOUR opinion public.

[RCT]

Originally Posted by Alex

Good article Ms. Ritchie.
Once I figured out I had no say in The Villages I sold (with profit) and relocated to a very nearby community. Good news, I am happier all the way around. I did a great deal of research and realize many people are very happy where they live outside The Villages.
Don't knock other places if you have never lived there. I think you are all paying too much to the developer and I really hope you don't end up paying more.

Yes, but look at so many communities around this area that advertise "close to The Villages". What is the reason? People from the areas come into The Villages for entertainment and such. I'd rather pay a little more to be here, instead of living in another area, and have to commute to here.

[djl8412]

Steve:

Everyone should be able to express a view in the form of a statement or question without being chastised for it. While I don't question your level of knowlege on these issues, I do have a concern on your comments toward those who may not be at your level. If you feel you're getting a good bang for your buck, no one should try to make you feel otherwise, but we all should be vigilant and ask that all the layers of these issues be easier to understand.

Also, how many other local newspapers are there around The Villages other than the Daily Sun?

[shermark]

After reading Laurens article about 25 times, I e-mailed her to thank her for the informative article. She replied back to me and all she is doing is letting the Villagers know what is going on with this bond issue. Her intent is not to be condescending nor does she think the Villagers are in anyway old,feeble,uneducated and can't think for themselves. She does not have any agenda towards the Villages. She is simply doing her job and giving the Villages a heads-up.

[starflyte1]

RCT, I am not sure that we are all talking about the same bonds. Yes, there is the one that comes with your home when you buy it new. You can pay it off with no interest.

However, the bond that is being talked about here is a different bond, for many millions of dollars, that the owners of TV owe the developer for the amenities, ie golf course, etc., sold to the owners. (I think that many assume that the amenities belong to them when they buy, but that is not always the case.) That pay off is a large % of your monthly expense charge paid to TV. There is no way for an owner to pay off their share that I am aware of.

[golfnut]

Maybe she will do a follow up post here since she started this thread.....GN

[SteveZ]

Originally Posted by djl8412

OhioGolf:

Please don't infer that Ms. Ritchie was inferring that Villages residents are old fools and feeble minded. While the majority of us did research the bonds, amenity fees, taxes, etc. before we bought here, I can't believe there are some who didn't fully understand all these facets and the more Ms. Ritchie writes, the more we can see how confusing it can be. I think all of us will have surprises in the future and it should be transparent.

I'm the one who made the "old fool" comment, and did read the entire examiner's report. I still believe in the "innocent until proven guilty" concept. I don't like it when a newspaper uses its journalistic pulpit to whipsaw people and cause consternation for its own commercial gain.

If this is an accounting dispute between the IRS and others, that will be determined according to the law. If there is anything beyond that, then the appropriate state and/or federal authorities will get involved.

So far only one side of the story has been heard, and that's of the IRS examiner, and based on only that side an "opinion" has been published. There's still a lot to hear before any real "truth" becomes evident, and everyone deserves that before being "opined" negatively.

[RCT]

Originally Posted by starflyte1

RCT, I am not sure that we are all talking about the same bonds. Yes, there is the one that comes with your home when you buy it new. You can pay it off with no interest.

However, the bond that is being talked about here is a different bond, for many millions of dollars, that the owners of TV owe the developer for the amenities, ie golf course, etc., sold to the owners. (I think that many assume that the amenities belong to them when they buy, but that is not always the case.) That pay off is a large % of your monthly expense charge paid to TV. There is no way for an owner to pay off their share that I am aware of.

The second article does address the bond on your home, yes. I understand the article, the first one, is about amenities, and all this was disclosed, and talked about, when the lawsuit came up, and the developers agreed to pay millions and millions for future upkeep of all the centers and such. My complaint still being about her is, that I agree, she is an opinion writer, but still, to form an opinion, you still must gather facts, to state and informed opinion, don't you? Not just gather enough to make a shocking story. This avenue makes her no better than a radio shock jock, in my opinion.

[Lauren Ritchie]

Hi again,

I don't want to bore you folks -- just thought I'd try to clarify a couple things. First, I don't see Villages residents as feeble minded or stupid. Most of the folks I've met up there are retired professionals with excellent minds. I particularly enjoy the League of Women Voters ladies who have asked me to speak several times. They're sharp.

That said, if I were looking for a retirement home, I'm not sure I'd do a ton of behind-the-scenes investigation to figure out some murky financing structure that doesn't on the surface seem to affect me. Unfortunately, it actually does in this case.

Several of your posters got it right -- there are two types of community development districts in The Villages, and they issue two types of bonds. The bond that is "attached" to your house, the one that you're told about and appears on your tax bill, is issued by what are usually referred to as the "numbered districts." Those bonds buy concrete properties, such as sewer plants, and only the residents of those districts are obligated to repay those bonds.

The Village Center Community Development District is a different critter, and I've never heard anyone say that this was explained at the time of purchase. But perhaps it is. I'd love to hear if someone was told about it.

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.

The Village Center CDD has the power to issue a different type of bond -- a recreational revenue bond -- which buys not only concrete things like swimming pools and golf cart paths, but also, "blue sky" items, such as the right to collect amenity fees.

One of the posters mentioned that people pay for these items, regardless of where they live, and I should get my act together before coming down on this method of payment.

To a degree, that is correct. Of course, any developer must charge for recreational things like pools and clubhouses and golf courses. I believe, however, that Villagers are paying twice and perhaps three times for the same items.

Think about it: When a developer builds a subdivision with clubhouses and pools and so forth, he typically includes those items in the cost of the house.

In this case, the developer has sold those goodie-type items to you through a purchase by the Village Center district, so those things ought to be deducted from the price of the house, right? In addition, he's sold you the infrastructure, such as sewer and water plants, through the numbered districts. Those items, too, ought to be deducted from the purchase price of the house, then.

Were they? Did you get a really sweet deal on your house? Did you pay far less for your house than people in other retirement communities pay? I think not. Ask yourself...when I bought a house, what did I buy? Theoretically, you bought only the actual lot and structure -- you're paying for everything elese separately, right?

If that's the case, you should have gotten a pretty cheap house. I don't think you did. The truth is that the cost of the amenties and the infrastructure was included in your house price. So, you're paying for them twice. Then, you're paying for them a third time because of the interest being paid on what are unnecessary bonds.

If that's OK with you, then God bless. Have fun. Ignore these columns. I disagree with your poster who doesn't think that Villages residents will be dragged into this IRS investigation. YOU are the district. YOU are its only source of income. It's not some disembodied entity. It's a taxing authority that issued bonds on YOUR behalf.

The fellow whose opinion is that nothng is going to happen may wish to do additional research. He will find that in other situations around the country where tax free bonds have been deemed taxable, the IRS typically requires that all or part of the bonds be redeemed or 'called'. To do that, the district would have to pay off the loan. And where would this money come from? It could come only from you, the property owner. I flatly asked the Village Center district manager if the district it had the financial capability to call the bonds (without bankrupty) and district officials did not answer. (tomorrow's column)

If the IRS can make stick its contention that the district and the developer are essentially one entity, then I think that opens the door to collect from the developer, too.

The notion that columnists who write for the Sentinel or any other newspaper do it to sell papers is a tired old claim without credibility that has long since lost any basis in reality. That's a diversion from the real issue, and if that were true, nothing in any paper would be believable. I don't mind when people disagree with my column -- and there's plenty of room to do so in this situation in particular -- but let's do it from a position of knowledge and respect.

I have done considerable research to try to present reasonable scenarios of how this might play out. There are more possible ways than I can detail, and I do not claim to be a bond expert. I don't think anyone can say what will happen yet. It's too early. But I think that there's at least a box to be drawn within which folks can see the possibilities, and that's what I've attempted to do with Wednesday's column.

Thank you for allowing me space to respond and to provide more information. I appreciate everyone reading the columns, too. And I look forward to hearing more from all of you.

Lauren

[iaudit]

RCT

The lawsuit did not address the bonds used to buy the recreation facilities. It involved the developer not using part of the amenity fee to establish reserves needed to cover capital expenditures to maintain/rebuild recreation facilities and the like, such as cart paths. Although the value paid the developer for these facilities has been criticized by many, the lawsuit had nothing to do with this type of bonds used, the method used to value the facilities and controlling interest held by the developer over the non-resident central district.

In addition, the lawsuit also involved the use of tee times for lifestyle previews. In settling the lawsuit, the developer was limited as to how many tee times could be used on courses north of Rt. 466. It is because of this settlement that tee times south of Rt. 466 are in short supply as he just increased the number available for lifestyle previews on these courses.

As far as the article being "shocking", all I see her doing is summarizing the opinion of the IRS documents and providing a link to them for all village residents to read and form their own opinion of the dealings of the developer.
Read them through and let me know what you think of her article then.

[RCT]

Originally Posted by iaudit

RCT

The lawsuit did not address the bonds used to buy the recreation facilities. It involved the developer not using part of the amenity fee to establish reserves needed to cover capital expenditures to maintain/rebuild recreation facilities and the like, such as cart paths. Although the value paid the developer for these facilities has been criticized by many, the lawsuit had nothing to do with this type of bonds used, the method used to value the facilities and controlling interest held by the developer over the non-resident central district.

In addition, the lawsuit also involved the use of tee times for lifestyle previews. In settling the lawsuit, the developer was limited as to how many tee times could be used on courses north of Rt. 466. It is because of this settlement that tee times south of Rt. 466 are in short supply as he just increased the number available for lifestyle previews on these courses.

As far as the article being "shocking", all I see her doing is summarizing the opinion of the IRS documents and providing a link to them for all village residents to read and form their own opinion of the dealings of the developer.
Read them through and let me know what you think of her article then.

Thankyou for the clarification.

[RCT]

Originally Posted by Lauren Ritchie

Hi again,

I don't want to bore you folks -- just thought I'd try to clarify a couple things. First, I don't see Villages residents as feeble minded or stupid. Most of the folks I've met up there are retired professionals with excellent minds. I particularly enjoy the League of Women Voters ladies who have asked me to speak several times. They're sharp.

That said, if I were looking for a retirement home, I'm not sure I'd do a ton of behind-the-scenes investigation to figure out some murky financing structure that doesn't on the surface seem to affect me. Unfortunately, it actually does in this case.

Several of your posters got it right -- there are two types of community development districts in The Villages, and they issue two types of bonds. The bond that is "attached" to your house, the one that you're told about and appears on your tax bill, is issued by what are usually referred to as the "numbered districts." Those bonds buy concrete properties, such as sewer plants, and only the residents of those districts are obligated to repay those bonds.

The Village Center Community Development District is a different critter, and I've never heard anyone say that this was explained at the time of purchase. But perhaps it is. I'd love to hear if someone was told about it.

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.

The Village Center CDD has the power to issue a different type of bond -- a recreational revenue bond -- which buys not only concrete things like swimming pools and golf cart paths, but also, "blue sky" items, such as the right to collect amenity fees.

One of the posters mentioned that people pay for these items, regardless of where they live, and I should get my act together before coming down on this method of payment.

To a degree, that is correct. Of course, any developer must charge for recreational things like pools and clubhouses and golf courses. I believe, however, that Villagers are paying twice and perhaps three times for the same items.

Think about it: When a developer builds a subdivision with clubhouses and pools and so forth, he typically includes those items in the cost of the house.

In this case, the developer has sold those goodie-type items to you through a purchase by the Village Center district, so those things ought to be deducted from the price of the house, right? In addition, he's sold you the infrastructure, such as sewer and water plants, through the numbered districts. Those items, too, ought to be deducted from the purchase price of the house, then.

Were they? Did you get a really sweet deal on your house? Did you pay far less for your house than people in other retirement communities pay? I think not. Ask yourself...when I bought a house, what did I buy? Theoretically, you bought only the actual lot and structure -- you're paying for everything elese separately, right?

If that's the case, you should have gotten a pretty cheap house. I don't think you did. The truth is that the cost of the amenties and the infrastructure was included in your house price. So, you're paying for them twice. Then, you're paying for them a third time because of the interest being paid on what are unnecessary bonds.

If that's OK with you, then God bless. Have fun. Ignore these columns. I disagree with your poster who doesn't think that Villages residents will be dragged into this IRS investigation. YOU are the district. YOU are its only source of income. It's not some disembodied entity. It's a taxing authority that issued bonds on YOUR behalf.

The fellow whose opinion is that nothng is going to happen may wish to do additional research. He will find that in other situations around the country where tax free bonds have been deemed taxable, the IRS typically requires that all or part of the bonds be redeemed or 'called'. To do that, the district would have to pay off the loan. And where would this money come from? It could come only from you, the property owner. I flatly asked the Village Center district manager if the district it had the financial capability to call the bonds (without bankrupty) and district officials did not answer. (tomorrow's column)

If the IRS can make stick its contention that the district and the developer are essentially one entity, then I think that opens the door to collect from the developer, too.

The notion that columnists who write for the Sentinel or any other newspaper do it to sell papers is a tired old claim without credibility that has long since lost any basis in reality. That's a diversion from the real issue, and if that were true, nothing in any paper would be believable. I don't mind when people disagree with my column -- and there's plenty of room to do so in this situation in particular -- but let's do it from a position of knowledge and respect.

I have done considerable research to try to present reasonable scenarios of how this might play out. There are more possible ways than I can detail, and I do not claim to be a bond expert. I don't think anyone can say what will happen yet. It's too early. But I think that there's at least a box to be drawn within which folks can see the possibilities, and that's what I've attempted to do with Wednesday's column.

Thank you for allowing me space to respond and to provide more information. I appreciate everyone reading the columns, too. And I look forward to hearing more from all of you.

Lauren

Thankyou for your response, and you have brought up some valid points. However, your comment about have we paid too much for our homes, depends on many factors. One, where you might have moved from. I moved from Boca Raton, Fl, and even in this bad housing market, yes, for what we have here, we paid CONSIDERABLY less than a comparable down there, REGARDLESS of all the expenses on top of the price of the home. Also, remember that part of the, what you consider higher price, is the lifestyle, aside from the amenity fee.
Also, in regard to your comment about columnists that write for papers do it to sell papers is a tired old claim, that is poppycock. Papers make money basically from the advertising. If you didn't get feedback from your writing, and all the other writers, whatever their specialty might be, be it sports, politics, whatever, do you really think you'd still have a job? Do you think, if people weren't buying your paper because there were parts of the writing that they were interested in, that the revenue would be the same from those advertisers? I think not.
That said, doesn't mean I don't respect your job, just because I happen to disagree on some points. thanks again for your efforts in educating us in these matters.

[katezbox]

As a not-yet-retired CPA and soon-to-be Villager, I feel I need to weigh in on this.

First of all, bonds are a standard method that developers large and small use to finance part of their costs. For example, did you know that a water (or gas or other) utility will charge the developer up front for the cost of bringing that service into a new neighborhood? In the case of water, this is fairly expensive as it includes the cost of the water main plus pump station(s) to maintain pressure for everyday and emergency (think Fire!) use. It also includes hydrants and service lines into each residence. If a new buyer had to pay for this as part of purchase, a lot fewer homes would be sold anywhere.

Secondly, as Steve states, the tax exempt status of bonds is never determined by a sole IRS agent. The Morse family (love 'em or hate 'em) has their legal team to put forth the argument as to why these bonds should be tax exempt.

Thirdly, the level of amenities in TV is far greater than in the average "retirement community." With any community that has an amenity fee assessed there is always a risk that it will increase - regardless of how the cost of the amenities are financed. Keep in mind that the purpose of the bond is financing.

Lastly, all reporters/analysts have an agenda. Lauren, part of your job is to sell newspapers for the Sentinel. That's OK. But, journalism is not only what you say, but how you say it. It is not so easy to convey passion for a topic without a degree of sensationalism.

As readers we need to examine all sources of information.

Thanks for listening to my soap box.

Kate

[shuffleboard]

Originally Posted by Russ_Boston

How is that possible? There must be some paperwork that mentioned that you had a bond to pay.

Unfortunately 1/2 of your monthly ammenity fee goes to pay off the bond(s).

[shermark]

correct me if I'm wrong iaudit, but what do tee times in the lifestyle preview have anything to do with what Lauren just wrote ??