Baywinds CDD/GMS-SF, LLC

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2 What is Baywinds CDD? A local unit of special-purpose government Established by MDC Ordinance No Enacted on November 15, 2005 Chapter 190 Florida Statutes 2

3 Possibility to Purchase the Vineyards Clubhouse 3

4 Homeowners obligation for the Vineyards Clubhouse Monthly Obligation (2018) Annual Obligation (2018) Club Expenses $31.96 Club Membership Fee $70.00 Sales Tax $7.14 $ Club Expenses $ Club Membership Fee $ Sales Tax $85.68 $1,

5 Current Membership Fee Obligation (Lease) Payable to the Club Owner As per the Club Plan Per Unit Total Year Monthly Annually Revenue Price 2018 $70 $840 $900, $15,008, $74 $888 $951, $15,865, $78 $936 $1,003, $16,723, $82 $984 $1,054, $17,580, $86 $1,032 $1,106, $18,438, $90 $1,080 $1,157, $19,296, $94 $1,128 $1,209, $20,153, Break $98 $1,176 $1,260, $21,011, Even $102 $1,224 $1,312, $21,868, Point $106 $1,272 $1,363, $22,726, $110 $1,320 $1,415, $23,584, $114 $1,368 $1,466, $24,441, $118 $1,416 $1,517, $25,299, $122 $1,464 $1,569, $26,156, $126 $1,512 $1,620, $27,014, $130 $1,560 $1,672, $27,872, $134 $1,608 $1,723, $28,729, $138 $1,656 $1,775, $29,587, $142 $1,704 $1,826, $30,444, No more Increase $142 $1,704 $1,826, $30,444, $142 $1,704 $1,826, $30,444,

6 As per the Current Club Plan, Purchase Price $16,723,200 HOA did the negotiation HOA has 1 st right to purchase the clubhouse, but it could agree for the CDD to purchase the clubhouse, which they did If HOA were not to be able to purchase it, the club owner could sell the facility to a third party 6

7 Interesting Factor of Value Obligation increases annually $4 per month per unit, please see table on the next slide CDD does not pay sales taxes, which results in savings for property-owners. Annually: $91, Total Savings in 30 years as the extend of the Bonds: $2,755,

8 Leasing vs. Buying Year Per Unit Annually Club Plan Payment Price Per Unit CDD Purchase - Annual Collection Total CDD Annual Net Obligations 2018 $840 $22,512 $15,008,000 $0 $ $888 $951,936 $15,865,600 $1,308 $1,402, $936 $1,003,392 $16,723,200 $1,308 $1,402, $984 $1,054,848 $17,580,800 $1,308 $1,402, $1,032 $1,106,304 $18,438,400 $1,308 $1,402, $1,080 $1,157,760 $19,296,000 $1,308 $1,402, $1,128 $1,209,216 $20,153,600 $1,308 $1,402, $1,176 $1,260,672 $21,011,200 $1,308 $1,402, $1,224 $1,312,128 $21,868,800 $1,308 $1,402, $1,272 $1,363,584 $22,726,400 $1,308 $1,402, $1,320 $1,415,040 $23,584,000 $1,308 $1,402,176 BEP $1,368 $1,466,496 $24,441,600 $1,308 $1,402, $1,416 $1,517,952 $25,299,200 $1,308 $1,402, $1,464 $1,569,408 $26,156,800 $1,308 $1,402, $1,512 $1,620,864 $27,014,400 $1,308 $1,402, $1,560 $1,672,320 $27,872,000 $1,308 $1,402, $1,608 $1,723,776 $28,729,600 $1,308 $1,402, $1,656 $1,775,232 $29,587,200 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402, $1,704 $1,826,688 $30,444,800 $1,308 $1,402,176 $46,950,384 $42,065,280 8

9 Does it make sense to buy? Potential Savings - Lease $4,885, Sales Tax Savings $2,755, TOTAL SAVINGS $7,640,

10 Community Development Districts (CDDs) How do they work? 10

11 What is the purpose of a CDD? Alleviates the burden on municipalities and counties to fund public infrastructure for new land development Provides an alternative source of financing to developers to fund public infrastructure for new development Offers a more efficient implementation of newly planned communities; highly used in fastest growing states (California, Texas, Carolinas, Colorado). 11

12 Why finance with a CDD? A need exists in Florida to implement newly planned communities to meet the demands of a growing population, and innovative and cost effective means of development financing help meet this demand New planned communities: Are part of the economic engine of Florida Bring progress and infrastructure facilities to the State, municipalities, and counties CDD provides access to public capital markets CDD enables low cost tax exempt infrastructure financing for new communities Banks may not finance a new community because the project is too large or the bank does not want to take the risk of the entire development costs. A CDD is a local unit of government that provides a readily available alternative source of funding 12

13 How many CDDs are in the State of Florida? Currently more than 600 CDDs exist within the State of Florida. 68 CDDs are located within Miami-Dade County. Each CDD is an independent special district If anything happens to the CDD: Municipalities, counties, and the state are not responsible for CDD obligations Each individual lot is responsible only for the special assessments allocated to that lot Bond debt is allocated to the individual lots 13

14 How is a CDD accountable? The CDD appoints a Trustee who will hold the bond proceeds and process only payments that satisfy the requirements set forth in the Trust Indenture. The Trustee is a Bank which only serves that purpose. The CDD is required to have a Trust Indenture (a bond document) that outlines the use of bond funds and procedures for paying eligible costs financed by the CDD. The Trust Indenture is prepared by a Bond Counsel who specializes in public financing. The CDD s Engineer provides an annual Engineer s Report identifying the conditions and status of the public improvements. The CDD must provide quarterly information to bondholders while the community is under ownership and control of the developer. The Bond is secured by a lien on the land to be improved; there is no payment obligation by the City, County, State or property owners outside the boundaries of the CDD. (Continued on the next slide/page) 14

15 How is a CDD accountable (cont d) The CDD Board of Supervisors adopts, at a public meeting, a proposed budget every year before June 15. If there is an increase from the prior year, a notice is mailed to the property owners within the CDD (information used as per the Property Appraiser s records), informing them of the reason for the increase and inviting the property owners to the public meeting where the final budget and assessments will be considered and adopted. A copy of the proposed budget must be provided to the local governing authorities having jurisdiction for purposes of disclosure and information. The final budget shall be adopted no earlier than 60 days after it has been proposed, also at a public meeting, after hearing any comments from property owners, which includes written statements and or s, before September 15 (if included on the tax bill for the property). CDDs are required to have an annual audit, performed by an independent Auditor. 15

16 CDD Board of Supervisors Governing body consists of five (5) members (Public Officials), with same obligations as any other public officer, which includes the filing of the Statement of Financial Interests. Board members must be eighteen (18) years of age, residents of the state of Florida and citizens of the United States. Initially, Supervisors are elected for staggered terms of four and two years by the landowner(s) based on one vote per acre or fraction of an acre or per unit if the property has been subdivided into individual folios. Commencing after the sixth year of the CDD s existence and 250 qualified electors reside within the CDD, two Supervisors whose terms expire shall be elected at an election conducted by the County Supervisor of Elections. Those Supervisors are elected for four year terms and must be qualified electors of the CDD. The remaining Supervisor whose term expires shall be elected by the landowner(s) and need not be a qualified elector of the CDD. Thereafter, as terms expire, Supervisors shall be qualified electors and shall be elected by the qualified electors of the CDD. 16

17 Baywinds CDD Current Board of Supervisors Supervisors and position Seat No. Term expires Type of Seat Miami-Dade County Supervisor of Elections Nicolas Roldan, Chairman 1 November-20 General Election Larry D. Parks, Vice Chairman 4 November-18 Land Owner 2 qualified resident Stephen McDuffie, Assistant Secretary Teresa Baluja, Assistant Secretary Raisa Krause, Assistant Secretary 2 November-20 General Election 3 November-18 Land Owner 1 qualified resident 5 November-20 Land Owner 17

18 What has been financed in Baywinds CDD Roadway Improvements Water Management System (including earthwork) Sanitary Sewer System Water Distribution System Public Right of Way and Open Space Improvements 18

19 Series 2006A Bonds/Refinanced Series 2017 Bonds Land Use Revised (1) No. of Units* ERUs per Unit (2) Total ERUs Debt Series 2006A Bonds Per Unit Annual Net (3) Assessment Series 2006A Bonds Per Unit Debt Ref. Series 2017 Bonds Per Unit Annual Net (3) Assessment Series 2017 Bonds Per Unit Annual Savings per Unit Residential: 60' SFH $ 13,868 $ 921 $ 10,954 $ $ ' SFH $ 13,477 $ 895 $ 10,626 $ $ ' SFH $ 13,087 $ 869 $ 10,311 $ $ ' SFH $ 11,915 $ 791 $ 10,102 $ $ Townhomes $ 11,133 $ 739 $ 8,822 $ $ Total 1, $ 13,510,000 $ 10,600,000 $ 97,571 Interest Rate 5.25% 4.11% Total (remaining 20yrs) $ 1,951,420 (1) Revised as per the unit of assigned folios the District has received from Miami-Dade County (2) Benefit is allocated on an ERU basis; based on density of planned development, with the 50' Single Family Unit = to 1 ERU. (3) Net amount, it w ill be grossed up of 5% for early payment discounts and collection fees 19

20 Series 2006B Bonds Par Amount $16,540,000 fixed interest rate of 4.9% Restructured in 2011 at a fixed interest rate of 7.02% Paid off entirely by now. Full obligation (interest and principal) paid by the Developer. Interest was paid in May and November; principal paid at closing by the Developer. 20

21 How do homeowners pay assessments? The CDD enters into an agreement with Miami-Dade County to be included in the Non-Ad Valorem section of the Property Taxes CDD provides assessment information to Miami-Dade County, which includes an insert that must: Identify that the CDD levies the assessment Provide a list or schedule of all applicable assessment rates Provide a description of the assessments Provide contact information for the CDD, including telephone and addresses Property taxes are due on or before May 1st of the year following receipt of tax bill; if taxpayer pays tax bill on or before November 30 of prior year, assessments are discounted by 4% (including the CDD levy). 21

22 Comparison and Estimates if Clubhouse is Purchased by CDD Nothing Changing (2019) CDD Purchasing the Clubhouse Club Expenses $ Club Expenses $ Club Membership Fee $ Club Membership Fee $1, Sales Tax $0.00 Sales Tax $89.01 TOTAL $1, TOTAL $1, Nov. Estimates 22

23 What is being presented? There will be an increase of approximately $ per year; although if compare to prior year assessments it will be $ ($21.78 per month). If taxes are paid with an escrow, increase will be monthly. Community will have an input. There will be 4 resident Supervisors in November. There will be no concerns with delinquencies, as it affects current budget. Budget will be controlled by the CDD. 23

24 Benefits of Buying with the CDD Issuance of Tax Exempt Bonds 30 Years to amortize the loan Collection annually, on the Property Taxes 24

25 Additional Benefit of Purchasing If Purchased, the facility obligation will be a fixed expense and the CDD will have the control of the Operation and Maintenance Cost (expenses). It is important to emphasize that if the community were not to buy the facility, the current owner could eventually sale it to a third party with the current obligation that has no limit on the O&M. 25

26 What will be the effect if the District purchases the Clubhouse? Public facility: does not mean that it is free to the public; on the contrary, it means that the facility is open to those who pay the annual assessment for the year (Debt Assessment and the O&M assessment for all the Club members.) $1,708.60* *Administrative cost will have to be added No Installments or prorations, same conditions as a homeowner/property-owner has Page 26

27 What Needs to Occur to make this a Reality Wednesday, July 25 th the Board will be hearing your comments. Next Monday, July 30 th the Board will be voting if it makes sense for the community to continue with this possibility. District will have to issue Bonds. Budget will have to be Adopted. September 7 th, 2018 O&M to be adopted. Property-owners will have opportunity to comment Purchase of the Clubhouse by the end of September. 27