City of Pompano Beach FL.

Palm Aire Special Recreation District

August 26, 2008 Referendum

Reasons To Vote NO

Date:  July 3, 2008

An Opinion By Valmore R. Lucier

On Tuesday June 24, 2008 we, the representatives of Oasis at Palm Aire Homeowner Association, appeared before the Pompano Beach City Commission to request exclusion from the Palm Aire Special Recreation Authority. We felt that our community had arbitrarily been included in the tax district, because some of the homes in our complex across the canal from Palm Aire faced one of their golf courses. There are many complexes in Florida that are adjacent to golf courses and benefit from such a view, but are not subject to inclusion in adjacent golf district taxation, especially when governing documents, such as ours, make no mention of any affiliation with adjacent golf courses. We provided a petition to the commission requesting exclusion from the proposed tax district. All but one of the homeowners who could be reached signed the petition.

The meeting was a unique experience to say the least. We knew we had a very slim chance of success since one of the original architects of the proposal was now Vice Mayor and, therefore, had a dominant position over us by being able to vote against our exclusion request.

Our original position was that we did not object to the proposed Palm Aire Special Recreation Authority Tax District as long as we were excluded from it, but when the commission denied our request and kept us in the tax district we were forced to change our position. We were now faced with a different situation. 167 of our Oasis owners were now going to be taxed for this district unless we were successful in convincing the majority of some 7000 Palm Aire Condo owners to also vote NO. That meant we now had to share with our neighbors the negative aspects of this proposal that may not be known or understood by many Palm Aire Condo Owners.

To fully understand the ramification of the proposed district, many current and historical related factors have to be understood to put in its proper light the current business case being presented as the justification for the need of a Special Recreation District and to understand its true lasting financial impact on current and future owners. Only then can one truly assess the impact of creating a Special Recreation District on the basis of “just in case” or “as insurance” to guarantee the survival of Palm Aire golf courses.

The news media gives us daily accounts of deteriorating economic conditions. For several months the Florida Legislature has been challenged to reduce the increasing tax and insurance cost burden placed on all Floridians.  We are all aware of current economic conditions. We are all struggling to make ends meet.  Some owners are struggling more than others. Those on fixed income are especially affected. We all face increased taxes, as well as higher costs for insurance premiums, association assessments, utilities, prescription drugs, food, and fuel.  Yes, foreclosures are a regular occurrence, too.   Now we few lucky ones can add one more --  a Special Recreation District taxation authority. The drafters of the district tell us we can initially expect to pay $200-$300 in taxes. That’s about the amount of the Tallahassee tax relief. The State gives and the District will take. So for us, tax relief will be zero. They also tell us that unless the district takes action there is no cost to us, but they have already collected $20/unit for the initiative (so far about $120,000) and they are not yet in business. That $20/unit is the equivalent of 5 years of unit-owner mandatory $4/unit/year condominium fund contributions to support the Department of Business and Professional Regulations (DBPR).

Other relevant economic factors:  The construction industry is in chaos.  Building new living units now is insane so we don’t have to worry at least for the short term about new construction.  But the real and relevant fact that is a major player in all of this is that throughout the State of Florida golf courses are struggling to make ends meet. That is an undeniable fact.

In many cases developers kept the golf courses and made nice profits selling them later to private contractors. They fell on tough times when revenues dropped because of current economic conditions and, yes, because of aging populations in homeowners’ association and condominium association golf courses. According to the PGA, there is also a steady decline in the number of golf players moving to Florida . Baby boomers are not so much into golf any more. The numbers of court cases where people are fighting against golf courses is also on the increase. Operating and maintenance costs are also increasing So what is a golf course owner to do when he can’t find a buyer and when municipalities have capped development and locked the zoning land uses? The golf course owner has two options depending on the situation. If the golf course is adjacent to either a homeowners’ or a condo association, then the golf course can merge with the association and have the members support the golf course via association assessment. Or, as is our case where so many associations are involved, it would be difficult or impossible to get every association to agree. In that case, the golf course owner can try to get a district created and get the funding for those golf courses supported by an affected tax base.

Some will tell you they are setting up a district as an insurance policy; what they are in fact doing is setting up a “bail out program.”

Golf course owners know that there is a lot of untapped money in communities such as ours, money that belongs to the property owners who are not paying a fair share into the golf kitty, in the view of the golf course owners.  It doesn’t matter that their home purchase contract had no such stipulations.

Once the district is fully operational, all the private golf course owners will line up to sell their golf courses to the district and then offer to continue to operate and maintain them for a fee -- a winning proposition for them at the homeowners’ expense. They also will get top dollar because they will tell the authority that they have a buyer willing to buy at a certain price, but that buyer may be thinking of developing the golf course into something else which really makes the authority want to buy it first.

You are told that if and when that happens, the district members will have the opportunity to vote on the issue. Here is how I would sell the public on voting for the purchase of a golf course. I would tell homeowners that the district was set up for just such a situation – the “just in case” argument. I would then tell them if we don’t buy the golf course, the buyer is planning to re-develop the site. That should do it. If for some reason the membership voted NO on the purchase, then the reason for the district to exist has just gone up in smoke unless you don’t mind having the tax burden associated with the option of again being able to vote on the purchase of the next golf course that goes up for sale. Otherwise, it’s business as usual as far as land use conversion, just as though you did not have a district with one exception:  You’re still paying taxes for that district for the next “just in case” situation.

It was stated that the district was being created to give the owners at Palm Aire the opportunity to limit capacity. From my standpoint, owners of Palm Aire have always had that capability. It is called government in action through owner participation.

If a new golf course buyer then tries to change the land use, he will have to come up with a development plan and an environmental impact statement and go before the City to get approval.  All of the owners can go to the hearing, speak against it, keeping the commissioners in their chairs listening to them until they convince the commissioners to deny the new golf course owner’s application. No different than it is now, but without a tax district.  I know there are those who will tell you that with the right lobby, money and influence it can be done, but only with owner apathy. If nobody cares, that’s fine but don’t make me pay for it. Then it is shame on them.

Remember the only value of the district is that it can buy the golf course; then you own it and the district forever. Think about new home buyers or condo buyers. Will they buy at a facility that has association assessment, a special district tax and the local government taxes or will they choose to buy property where there are only an association assessment and local government taxes?

As to the overall cost of such a district over time, I suggest to you that nobody knows what that will be. To determine the real cost, one needs to know what the district will incur in cost for the following items:

1.      The legal cost;

2.      Operating administration costs;

3.      The size and salary of the working staff;

4.      The cost of eminent domain purchase;

5.      The cost of the purchases of all these golf courses;

6.      The cost of operating and maintaining those golf courses forever; and

7.      Cost of bond issues.

Until all these costs are known, the real related tax burden is anybody’s guess.

If this can get so expensive for so few, then why do local governments approve these districts, you may ask? The answer is simple.  It gets rid of a headache for local governments and frees them from being hounded over increased taxes that fall on a very select group. Local governments welcome the layer of beaurocracy with taxation authority sandwiched between them and the people. These districts also act as a welcomed buffer for local governments.

From the best I can determine, the genesis for the formation of the Palm Aire Special Recreation District emanates from a November 2006 article written by Katherine Salant entitled, “Golf course living: a retiree’s dream” where she asks, “How can you be sure that it (golf course) be there in 20 years?”  The idea of a Special Recreation District took off from there.

Now you have the whole story to help you decide and my reason why I recommend you vote NO at the August 26 referendum unless you want to be shackled with an added layer of bureaucracy and a new permanent tax burden on the assumption that you cannot trust the existing government mechanisms to protect your interests and listen to you.

This initiative has the making of another Boston Tea Party and we know what resulted from that. As I said at the hearing, “This GREEN initiative is not about GRASS it is about $$$$$.” And that is my opinion.