Marion And Sumter County Bonds

You are like many who are interested in The Villages but have questions about something called a "bond" and other fees. Hopefully, this will make you better informed.

The Villages spans three counties in Central Florida - Lake, Marion and Sumter. Marion and Sumter counties have the Bond Assessment and the Annual Maintenance Assessment, while Lake County has neither.

When the developer decided to expand into Sumter County in the early 1990s, there was no infrastructure in place to support the building of thousands of new homes. In order to develop that infrastructure, the developer created Community Development Districts (CDD) that are special purpose, local governments created to provide those services that are normally provided by a town or community.

For example, the Village Community Development District (VCDD) provides and maintains the water and sewer lines, roads, transportation paths, storm water systems, curbs, gutters and street lights.

The costs of building and maintaining this infrastructure are paid for by assessments. These are once-a-year charges that appear on the residents' annual property tax bill.

There are two different types of assessments; Infrastructure Assessments for the construction of the physical infrastructure and Maintenance Assessments that pay for the cost of maintaining that which has been built.

The Infrastructure Assessment is represented by the "bond" assigned to each home built in either Marion or Sumter County. The amount of the bond is determined by prorating the debt per acre within the VCCD multiplied by the number of acres in your subdivision and then divided by the number of lots within the subdivision.

For example, if the infrastructure construction costs $5,000,000 and there are 1,000 acres within the District and your "unit" has 50 acres and there are 200 lots, the amount of bond per home would be $1,250.

The calculation would be $5,000,000 divided by 1000 acres = $5,000 per acre. Your unit has 50 acres @ $5,000 per acre or $250,000 for your unit. $250,000 divided by 200 lots = $1,250 bond per lot for your unit.

Since the District does not have $5,000,000 in cash, it sells bonds, or borrows the money, to fund the construction of the infrastructure. This debt is then allocated to each lot using the formula just discussed. The assessment will appear each year on the tax bill until the bond issue is paid in full. You may pay off that bond debt any July to avoid paying the bond's interest charges. Once the bond is paid in full, that assessment will no longer appear on the property tax bill.

The Maintenance Assessments are charged to each lot using the same formula as that used for the Infrastructure Assessment. Maintenance budgets are established by the County Board of Supervisors' during their annual budget processes. It may be adjusted up or down depending upon the level of services needed and the costs of the bids solicited to perform those services. This assessment is called an "Annual Maintenance Fee" and it never goes away.