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Crist sides with tax districts

Published Aug. 24, 2005

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 may 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 could also 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. Just in the last 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."

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State lawmakers created community development districts in 1980 as a way to encourage better roads, sewers and other utilities, which at the time were 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, many homeowners complain 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 sit 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.

The city of Miami Gardens, in Broward County, asked for the opinion. As new community development districts were being built there, city officials said it makes sense to monitor them.

"Municipalities have a general obligation to its citizens and the residents who reside in a CDD to ensure the CDD is managed in a sound fiscal manner," said its city attorney, Sonja Knighton.

But 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 more closely, 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, not other governments, is the best way to cure wrongdoing on CDDs.

"If they're playing games with the money, that's against the law," Nicholas said. "But that's not the city's job to determine. If the city gets involved with CDDs, why stop there? The city could then get involved in overseeing the conduct of the county, the hospital, the toll authority."

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That hands-off approach is cold comfort for many homeowners in CDDs who are desperately looking for officials to investigate hunches about malfeasance. Welcome to 21st Century government, McKenzie said.

The governments that are increasingly found in suburbia _ the homeowner associations, the condos, the CDDs _ represent a shift to the private control of services that had been provided by the major cities since the Civil War, he said.

"A major structural change in our government is under way, and what's been missing is the critical ingredient of accountability," he said. "Right now, the pervasive sense in these communities is: "If you don't like it, get a lawyer.' I'm not sure that's a very good answer."

Dingfelder, for one, said he's disappointed with the attorney general's opinion. He said he'll ask if the city can get Hammond to clarify the opinion, or to get the Florida League of Cities to lobby state lawmakers so that CDDs can be monitored by local governments.

"I don't think cities should have a lot of authority over CDD boards that have duly elected members," he said. "But when you get real people living in communities like Cory Lake Isles and they don't get to have a say in how their money is spent, I have a problem with that."

Thomason says he properly spends the money he collects from homeowners. He said the city's wasting time investigating the district's finances.

"There's nothing there," he said.

Michael Van Sickler can be reached at (813) 269-5312 or