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Article Courtesy of Sarasota
Herald-Tribune
By Earle Kimel
Published December 5, 2022
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NORTH PORT – Gran Paradiso property owners have sued the West Villages
Improvement District over the cost of irrigation water, which was set through
negotiations with the developer early in the south Sarasota County subdivision's
creation.
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The suit, Gran
Paradiso Property Owners Association president Steve Glunt
said, is a strategy to open talks with the district – a
special government empowered to build infrastructure on land
once known as the Thomas Ranch and levy the fees to pay for
it.
“There’s a disagreement over the pay structure and the fee
structure and how it came about and recent changes over the
last four or five years,” Glunt said. “What we’ve asked for
all along is an opportunity for us to review the documents
and talk about the history of where we are and do something
that’s fair and reasonable to both parties.”
The issue erupted once Gran Paradiso refused to pay a
$34,696 quarterly bill for July-September that was broken
down as $28,113 for irrigation water; $19,937 as a well
availability fee and a capital recovery charge of $6,646.
The West Villages Improvement District responded with a
letter advising the property owners that if they did not
pay, irrigation water would be shut off on Nov. 24.
Both sides appeared before 12th Judicial
Circuit Court Judge Hunter W. Carroll on Nov. 22 and agreed
that the water would remain on until Dec. 9, the next
scheduled court date. |
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The Gran Paradiso Property Owners filed suit against
the West Villages Improvement District and Lennar over an irrigation
pact made prior to residents assuming control of the association.
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Rollback to 2009 rates sought
Gran Paradiso sued both the West Villages Improvement District and the
developer, Lennar, seeking to nullify a 2018 price change voted in by the
special district's board that set up the latest rates of $0.66 cents for
reclaimed water use. It also established the well availability fee and
capital recovery charge.
Previously, the irrigation water cost $0.39 per every 1,000 gallons, based
on a 2009 agreement.
The agreement was amended in January 2019, while Lennar still controlled
Gran Paradiso, and doesn’t expire until January 2117.
The property owners also claim that Lennar violated its fiduciary duty by
negotiating that contract.
Gran Paradiso attorney Joseph Herbert called that 100-year agreement,
“patently unfair and unreasonable,” and pointed out that it conflicted with
the 2009 deal in part because it includes a mark-up of reclaimed water the
special district WVID buys from the city of North Port.
That 100-year deal was negotiated three months prior to the turnover of Gran
Paradiso from the developer to the property owners.
Herbert contends that costs over the long term for the association, when
allowed future rate increases are factored in, could be as high as $2.8
billion.
Gran Paradiso has proposed that it be allowed to pay the $0.39 per
1,000-gallon fee instead of the high rate and additional fees until the
dispute is resolved.
The West Villages district manager, William Crosley, said via email that,
“The WVID looks forward to an amicable resolution with the Gran Paradiso HOA
and will continue to follow the process outlined by state law to seek a
cooperative partnership with the HOA for the benefit of its residents and
landowners.”
Long history of the WVID
The West Villages Improvement District was established in 2004 to build and
administer infrastructure in the 7,800-acre portion of the Thomas Ranch
annexed by the city of North Port. It was expanded in 2006 to include
another 3,700 acres of the ranch in unincorporated Sarasota County which is
now being developed as Winchester Ranch.
It is also the only entity that remained from the 2009 deal Gran Paradiso
homeowners point to as reference.
Lennar bought Gran Paradiso in February 2014, in the aftermath of the Great
Recession.
It paid $26.6 million for Gran Paradiso's 370-acre, 1,999-lot subdivision as
well as a then-unfinished clubhouse and an ostentatious entry gate.
The builder also paid Lee Wetherington Homes $4 million for 164 lots that it
owned.
In 2014, Mattamy Homes, Canada’s largest home builder, paid Atlanta-based
developer Stan Thomas for $86.5 million for the remaining 9,650-acres of
Thomas Ranch – including the 3,700 acres in unincorporated Sarasota County.
Crosley explained that the well availability fee, charged to all users in
the district, was established as part of a 2019 independent rate study and
is charged by the overall developer, Mattamy Homes, “for WVID to use water
drawn from its wells for irrigating land throughout the district.”
The capital recovery charge, which was also established as part of the 2018
independent rate study, supports the cost to replace and repair
infrastructure in Gran Paradiso and throughout the WVID, Crosley wrote.
Hebert’s suit also references wells purportedly owned by Gran Paradiso, as
included in a permit issued by the Southwest Florida Water Management
District.
About 38.5% of the groundwater produced under that permit – about 149,000 of
an allowable 386,000 gallons produced over 12 months – come from those
wells.
Hebert noted that Gran Paradiso receives no payment for water produced
through those wells.
Crosley wrote that the 2018 joint water use permit issued by the water
management district was issued to the WVID and The Ranch Land Operations, a
limited liability corporation that is an affiliate of Mattamy.
The WVID is the permit holder and the only entity allowed to develop and use
that water.
Irrigation water rates vary
The water used to irrigate homes and common areas within the West Villages
Improvement District is a mix of reclaimed water it purchases from the city
of North Port and water from the irrigation wells.
It pays North Port $0.25 per 1,000 gallons for reclaimed water.
In contrast, North Port charged typical residential reclaimed water
customers $0.68 per 1,000 gallons of water; while bulk use customers –
typically golf courses – pay $0.31 per 1,000 gallons.
It does not charge customers a readiness to serve fee.
The city of Venice charges its residential customers $1.42 per 1,000 gallons
for reclaimed water up to 5,000 gallons of use and $2.01 per 1,000 gallons
after that.
Bulk users can get low-pressure delivery for $0.187 per 1,000 gallons.
Venice also charges a monthly readiness to serve fee based on pipe
size. Sarasota County charges $0.48 per 1,000 gallons for high-pressure
delivery to residential and commercial customers or $0.26 per 1,000 gallons
for low pressure customers that have their own effluent storage and pumping
facilities.
Crosley stressed that while the WVID is hoping for an amicable solution, it
does provide irrigation for the majority of property in the district and
that if followed statutory requirements for the adoption of its rates.
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