Opinion a win for tax districts

Florida's attorney general says cities and counties can't regulate the districts.

It's a blow to Tampa officials trying to question a local developer.

COURTESY : St. Petersburg Times
Published January 7, 2005

TAMPA - Cities and counties have no authority to monitor the special taxing districts fueling Florida's suburban homebuilding boom.

So says the Florida Attorney General's Office in an advisory opinion that could stifle attempts by Tampa officials to find out how a developer spends the millions he collects from homeowners in a New Tampa subdivision.

The opinion also could further weaken oversight of these districts at a time when they are the most popular way to build gated communities in Florida, particularly in Hillsborough and Pasco counties.

In the past five years, the number of districts has surged from 94 to 295 in the state, tripling the number of people who are governed by private developers.

"What people don't understand is that we're seeing a revolution in government," said Evan McKenzie, author of Privatopia: The Rise of Private Government. "We're moving away from all-purpose governments, like the New York City of the 1960s, to smaller, more specialized governments controlled by private interests. Now that more of us live in this new world, the question is: Who oversees it? The answer so far is: No one."

State lawmakers created community development districts in 1980 as a way to encourage better roads, sewers and other utilities, which at the time was sorely lacking in Florida subdivisions.

In land-rich Hillsborough and Pasco counties, the districts have become a crucial tool for developers. Hillsborough leads the state with 34 districts. Pasco is third, behind Miami-Dade, with 25.

While these districts are technically a form of local government, some homeowners say they aren't treated that way. Developers typically control a board for the first six years of a subdivision. If homes don't sell, it can take even longer. Developers choose the people who serve on the board, which decides how the money collected from homeowners is spent.

Cory Lake Isles is a tropical-themed New Tampa community of more than 300 homes. Since 1992, the subdivision's developer, Gene Thomason, has appointed himself, his wife, son, friends and business partners to the board, which in turn has awarded his company millions of dollars in sales of land, dirt and other contracts.

Much of the money the board spends is collected from homeowners every year in assessments. They pay $2,188 to $2,923 a year in special taxes and fees on top of their property taxes.

Thomason diverts nearly $400,000 a year from homeowners' assessments into a maintenance account that is controlled not by the district, but by Cory Lakes, Ltd., Thomason's private company. He holds board meetings, which are open to the public, 30 minutes away from the subdivision.

City Council member John Dingfelder sought greater scrutiny of Cory Lake Isles in November after reading a story in the St. Petersburg Times and a district audit that he said "implied unusual stuff."

Dingfelder denounced Thomason's ties to the board as an "extremely incestuous relationship." He asked council attorney Martin Shelby if the city could monitor the district more closely.

In a report Shelby is scheduled to give during today's council meeting, he cites a Nov. 23 opinion from the Florida Attorney General's Office that asserts cities have no powers over districts.

Florida assistant attorney general Gerry Hammond wrote that the districts are exempt by the state from municipal government regulation.

That conclusion was endorsed by two of the authors of the 1980 law that created the districts: Jim Nicholas, professor of law and urban planning at the University of Florida, and Tallahassee lawyer Ken van Assenderp. Cities and counties would be held liable for the follies of districts if they started reviewing them, van Assenderp said.

"Governments don't regulate each other," van Assenderp said. "Leave them alone. This is not a perfect system, but if there's an abuse of the law, the people living there should take them to court."

Nicholas said the courtroom is the best way to cure wrongdoing on CDDs.