The Villages Voice - November 2016NOTE: Adobe PDF Reader is required in order to view the complete Village Voice. If you do not have Adobe PDF reader installed, please download it at www.adobe.com. This is a free download.
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VHA Q & A with Janet Tutt on the Purchase of Amenities and Recreation Facilities So 466
VHA Q & A WITH JANET TUTT The announcement of the purchase of amenities and recreation facilities South of CR-466 by the SLCDD has resulted in a lot of questions, false information and “swimming pool” rumors. In order to answer these questions and provide complete and accurate information regarding this purchase, the VHA presented the following question to Janet Tutt, District Manager of The Villages Community Development Districts. QUESTION – Why is the purchase of the amenities and recreation facilities South of CR-466 a wise long term decision for Villages Residents living in those Districts? Numerous Residents are wondering why we are spending all of that money and what are the benefits of doing it now vs. later? JANET TUTT – Thank you for the opportunity to address the purchase of the Amenity revenue stream and recreation facilities. There have been a number of rumors regarding the sale, and it has resulted in confusion and angst on the part of many residents. It was Mr. H. G. Morse’s vision that the amenity facilities and activities in The Villages would be owned by local government to provide sustainability and transparency. He believed it would best serve the residents. And to this date he has been correct. When residents purchase a home in The Villages, they sign a contract that provides that they will have access to the amenity facilities and services in place at the time they purchase their home in exchange for a monthly amenity fee. The amenity fee residents pay to Villages of Lake-Sumter, Inc. (VLS) is a fee for service. Within the contract is the ability for the VLS to “assign” or sell the amenity fee revenue and facilities. To this date, VLS has sold 6,604 Amenities (rooftops/residences) and facilities to the Sumter Landing Community Development District. This sale, along with the 21,707 amenities that have been sold to The Village Center Community Development District, provides for a government entity ownership. The benefits to local government ownership? Just some of the benefits of government ownership are that all of the Districts’ financial planning, meetings and actions are open for public participation. All of the Districts’ finances, budgets, accounting and audits are open for public review; plus there are fiscal benefits as a result of local government ownership. There is a misunderstanding by some who believe it is the residents that are taking on the debt of the bond that is being issued by the SLCDD. That is incorrect. Included with the purchase, the District will receive the amenity fee revenues from the purchased rooftops which will be used to pay for the debt service, the operation and maintenance costs along with funds set aside in reserves. How much of the Amenity Fee will be used to pay debt? A portion of the amenity fees that is NOT needed to provide the outstanding level of amenity services and maintenance, a portion that is NOT needed to fund reserves for future capital/maintenance needs and a portion that is NOT needed for working capital (everyday bank account). Just as an example, there were 6,604 amenities purchased by SLCDD in 2005 from VLS. Since that time, services and maintenance have been kept to the same high standard and SLCDD currently has $11,250,000 in reserves and over $6.8 million in working capital in the budget for the beginning of this fiscal year. And in 22 years, all of the amenities and facilities will be paid for in full. One final point is the question of how the price of the purchase was established. As provided in the negotiated purchase agreement, both the District and VLS had an independent valuation conducted. The Agreement provided for a purchase price to be the lesser of the two valuations if they were within 5% of each other or an average of the two if they were within 10%. As the valuations were within 10%, an average of the two was used. The company the District used is a very reputable firm (Public Resource Management Group) that provides these services for government entities throughout the southeast. VLS used a renowned Florida economist (Fishkind and Associates) who provides these services for a multitude of clients. We, fortunately, are in a very good financial market that will benefit us by pricing the bonds before the beginning of 2017 when there is anticipation the fiscal benefits will begin to decline. Finally, this purchase was always anticipated and part of the plan to provide for a strong future for this community: a sustainable model that benefits all the residents in the long term. Your amenity fees will not be impacted and the only adjustments will be the CPI annual adjustment you currently experience based on your declaration of restrictions. I welcome everyone to visit the District web site and look through the documents ranging from the purchase agreement to the valuations to the various bond related documents. Should residents have questions, they can contact me at email@example.com. We appreciate and will respond to everyone’s input. We also urge everyone to attend District Orientation or Resident Academy to better understand your local government. Just check out our web site at www.districtgov.org for more information.