One FL Community Development District’s internal conflict

By Deborah Goonan, Independent American Communities

image

Lately I have been reading about special tax districts created for the purpose of constructing and managing infrastructure in large, planned communities. These districts go by different names, but in Florida, they are called Community Development Districts – CDDs for short.

CDDs are created as units of public government, not private organizations. There’s no corporate body, and the board of supervisors must operate under Florida’s Sunshine Law, which require meetings and records be open to the general public.

However, unlike a city government, a CDD’s governing board is initially controlled by original landowners, typically a developer. After 7-10 years, the board of supervisors begins to transition to residents by way of public election. Electing someone to a CDD is similar to voting for a member of city council or the local school board – registered voters who reside in the CDD cast ballots at their regular polling place on election day.

One such CDD is Julington Creek Plantation in Jacksonville. And they’ve been having quite a lot of conflict in the community over the past several years, as explained in the following article:

Dispute among residents simmers – sometimes bubbles over – in Julington Creek

Residents bitterly divided over management of neighborhood’s considerable amenities

Posted September 24, 2016 04:18 pm – Updated September 26, 2016 10:03 am
By Nate Monroe (The Florida Times-Union)

Preview:

Head south on the Interstate 295 beltway, past the office parks and bug-infested retention ponds on the outskirts of Jacksonville, cross into St. Johns County, turn left onto Davis Pond Boulevard, and enter a suburban oasis.

Damp grass lines the roads in this little burg of more than 5,000 upscale homes, where residents go in search of better schools and safe streets, quietly tucked behind miles of sprawl.

But this prim suburban veneer masks a seething anger brewing among many neighbors here.

A governing board of residents is — not for the first time — bitterly divided over the management of the neighborhood’s considerable amenities, which include pools, tennis courts and recreation and fitness centers.

Additional excerpts:

“We’re our own little town, and with that we have several factions that hate each other’s guts and want to do anything they can to destroy each other,” said one resident, reflecting on recent events. “Clearly this neighborhood is polarized.”

Welcome to Julington Creek Plantation.

Julington Creek is a community development district — a special governing entity that after time acts essentially like a homeowners association on steroids, or City Hall Lite.

Created to provide development incentive, state law allows these districts to issue bonds to pay for the construction of public infrastructure and other improvements within a development (like Julington Creek’s recreation center). The debt is paid off by an assessment levied by the district on its residents, payments that appear on annual property-tax bills.

The development is governed by a five-member board that is initially controlled by a developer and eventually turned over to residents, who must win elections to take board seats. Like a city or county government, the districts must comply with state open-record and Sunshine Laws.

Read full article here:

http://jacksonville.com/news/metro/2016-09-24/story/dispute-among-residents-simmers-sometimes-bubbles-over-julington-creek

In summary, the CDD board of residents (elected supervisors) has been split over what to do about their current amenities manager, Angi Palmieri of Elite Amenities, Inc, hired in 2015.

Julington Creek Plantation is a large scale planned community of more than 5000 homes. Its amenities include 7 pools, tennis courts, recreation and fitness facilities.

In August, five of the Community Development District’s seven pools had to be shut down after the Florida Department of Health found the water chemistry to be off-balance. According to reports, several children got sick from swimming in the water before the pools were closed temporarily for chemical treatment.

Discontent over pool maintenance, as well as complaints from former employees, led the District Manager to order an extensive investigation of the Elite Amenities, and General Manager Angi Palmieri. The result of that investigation was a lengthy written report, pointing to inappropriate and ineffective management by Palmieri, allegations she denies as “hearsay” made by “disgruntled employees.”

Here’s the Video report on the investigation:

Action News Jax Investigates: Julington Creek Plantation management company investigated

(Danielle Avitable, Action News Jax Updated: Sep 12, 2016)

At the September 29 District board of residents meeting, Palmieri was ousted in favor of hiring the management company that bid against Elite Amenities in 2015, Vesta. 

Also, one of the 5 CDD board members has resigned in the midst of the shakeup, fed up with the negativity and infighting.

Does any of this sound familiar?

 

Although a CDD is presented as a public entity – a unit of government with a special, somewhat limited purpose – in reality, a Florida CDD is a type of Public Private Partnership.

The National Council for Public Private Partnerships describes P3s as follows:

Public-Private Partnerships Defined
A public-private partnership (P3) is a contractual arrangement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.

The public agency is the Florida Land and Water Adjudicatory Commission. The private sector entity is the land developer. The private developer builds the infrastructure and amenities of the community, and the public sector provides financial capital in the form of bonds. Those bonds are later repaid by purchasers of property in the CDD, by way of a property tax assessment.

As a P3 that starts off life under control of land-owning developers, buyers of homes in a CDD can find themselves absorbing the risks and financial losses of a developer in an economic downturn. And, in fact, hundreds of CDDs in Florida alone went bankrupt in 2008-2011. Homeowners were left paying back thousands in property taxes to repay bonds for unfinished communities.

As Julington Creek exemplifies, CDDS that have made it through the last recession relatively unscathed do not escape political dysfunction and infighting typical of HOAs. I suspect that’s because most CDDs are intertwined with the coexisting homeowners association, each with its separate but related responsibilities. Even in an upscale community of educated homeowners such as Julington Creek, the conflict can get ugly. CDD board members are sucked into the melodrama behind that internal conflict. CDD staff as well as contractors suffer collateral damage, and residents enjoy the privilege of paying for this chaos and animosity.

 

References:

CHAPTER 190 COMMUNITY DEVELOPMENT DISTRICTS

Public-Private Partnerships: The Good, Bad and Ugly

Florida Community Development District Report

7 Keys to Success, NCPPP

 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s