COURTESY : OCALA STAR BANNER
BY CHRISTOPHER CURRY
Published February 1, 2004 

THE VILLAGES - For Villages residents Joe Gorman and Russ Day, waiting in vain for the state Legislature to reform Florida's community development districts law is becoming an annual tradition.

For the past three years, Gorman, Day and the senior citizens' lobbyist group The Florida Silver Haired Legislature, have proposed sweeping changes to Chapter 190 of Florida Statutes, which deals with the districts - known as CDDs - that developers can use to fund construction and services. But each spring, their call for change seems to fall on deaf ears, Gorman said, and this year looks no different.

With the legislative session starting March 2, the only blips on the radar screen are two similar housekeeping bills - one by the Senate Committee on Comprehensive Planning, the other from State Rep. Ken Littlefield, R- Zephyrhills.

"The bills are totally inadequate. They miss the mark by a mile," Gorman said. "There are residents rights that I think are being monstrously violated and these bills are not addressing them at all."

Gorman, Day and the Florida Silver Haired Legislature want developers to be subject to stronger disclosure requirements when telling a prospective home buyer the cost of living in a CDD. In The Villages, Gorman said that cost includes $115 a month in amenities fees, between $200 to $800 in an annual maintenance assessment, about $128 annually in trail fees to enjoy "free golf for life" - and also the bond debt incurred by the individual residential community development district into which a homeowner moves.

They seek beefed up conflict-of-interest provisions in the law, which currently has a broad exemption for CDDs not shared by city or county officials. And they want residents to have approval before the boards of commercial CDDs (like the Village Center and Sumter Landing districts) make purchases from a developer by borrowing millions of dollars through bonds that are paid back by resident amenities fees.

The proposed legislation would do none of those things. Instead it would tweak Chapter 190 by providing procedures for dissolving CDDs after their bonds are paid off and they have no maintenance obligations left, cleaning up some election procedures, and allowing candidates for a board of supervisors to either pay a filing fee or submit a signed petition to qualify for the race.

"They're pitiful," Day said of the legislative proposals.

The Senate committee based its bill on results of a survey sent to 45 groups and individuals, with 35 of those responding. Among them was Gorman, who said only three or four resident groups had input. Another respondent was Jim Nicholas, the University of Florida law professor who originally wrote Chapter 190 in 1980. With 226 community development districts now in Florida, the law has never been amended since Nicholas wrote it.

Nicholas said the law was intended to have growth pay for growth by creating a "reasonable means" for developers to pay their own costs and provide services to residents and "generally" still meets those goals. But he said the law put the burden on local municipal and county governments to use "common sense" when approving CDDs and that has not happened in some cases. Many of the problems he identified echoed the concerns Gorman and Day have with the two commercial Villages CDDs. He called for better local oversight of CDD spending when a structure originally intended to pay for streets, utilities and other forms of infrastructure was now being used to buy recreation facilities and golf courses.

He said local governments should not approve districts that encompass commercial land controlled by the developer and will never have residents to elect a board of supervisors. Instead, commercial CDDs such as the Village Center and Sumter Landing districts have boards primarily comprised of the developer's employees and other business associates, which is allowed under the broad conflict-of-interest exemption for CDDs.

"CDDs clearly intended that there would be electors in a district and the district would be turned over to them," Nicholas said. "Local governments need to say, if there are no electors, we're not going to do it."

Gorman often describes the situation with The Villages commercial districts as "taxation without representation" because residents are not allowed to decide how the amenities fees they pay are used. Since 1996, the Village Center district has borrowed in excess of $400 million to purchase utility systems and recreational facilities from the developer, The Villages of Lake Sumter Inc.

In this fiscal year, roughly $13 million - more than half the district's annual budget - goes to paying off bond debt. When borrowing money for recreational facilities, the district purchases not only the facilities, but under the "income approach" of financial analysis also buys the rights to the monthly amenities fees residents agree to pay the developer when buying a home. Under the arrangement, the developer receives up front the revenue it would get if it owned and operated the recreational facilities for decades, minus projected expenses.

"He (Villages of Lake Sumter CEO H. Gary Morse) in essence walks away from it with all the money in his pocket and leaves the VCCDD to collect the fees for the next 30 years," Gorman said.

Villages government administrator Pete Wahl, however, offered a different viewpoint, saying the monthly amenities fees are "contractual fees that a property owner enters into when they acquire a property from the developer, not a tax or assessment."

He answers the claim of taxation without representation with the comparison to an individual purchasing an automobile and agreeing to a routine maintenance contract with the manufacturer. Just as agreeing to that contract does not give the car buyer the right to decide who sits on the manufacturer's board of directors, agreeing to pay the amenities fees does not allow Villages residents to vote on the board of the Sumter Landing and Villages Center districts.

Gary Moyer, the Chapter 190 guru who recently departed as Village Center district manager, argued the organization of the two commercial districts in The Villages offered the open records of a government entity but also had business people making business decisions on matters such as utility funds and recreation finances.

"These types of things are better served by having business people do that than opening it up to the political process," Moyer said. "I don't see anything wrong with business people sitting on a board of supervisors."

Moyer and Wahl said the organization of the two commercial districts ensured services and recreational facilities would be provided to residents "in perpetuity" - something they said might not happen under a developer, a residential CDD or a homeowners' association.