Florida CDD sponsored charity events

Started by LisaR21 • 18 replies • 362 views

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LisaR21 (Florida)
Posts: 22

Posted:

Our Florida CDD has been hosting a tennis charity event for many years. The event of roughly 200 participants-is run by the CDD tennis center employees. This event uses the tennis facility for 3 days free of charge and the CDD purchases the supplies. While another entity- collects the tournament registration of which there are not detailed records. All the cash brought in for raffle and silent auction items was spent on more supplies. There are no receipts available for any of these cash purchases. Can a CDD as a special purpose government-sponsor and underwrite a charity event?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

A HOA is NOT a charity. It is a non-profit corporation unless it is a rare "For profit". It sounds like the HOA is allowing this group to use their facilities for their charity event? Would need more details on the relationship on what is going on. A non-profit is allowed to collect as much as it spends. It would make sense any money it collected would go to it's expenses. The extra is subjected to IRS terms.

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By LisaR21 on 06/06/2023 4:34 AM
Our Florida CDD has been hosting a tennis charity event for many years. The event of roughly 200 participants-is run by the CDD tennis center employees. This event uses the tennis facility for 3 days free of charge and the CDD purchases the supplies. While another entity- collects the tournament registration of which there are not detailed records. All the cash brought in for raffle and silent auction items was spent on more supplies. There are no receipts available for any of these cash purchases. Can a CDD as a special purpose government-sponsor and underwrite a charity event?

If this CDD's governing documents (covenants et cetera; municipal/county ordinance establishing and structuring the CDD; Florida Statute FS 190) have verbiage indicating the CDD is to be run for the benefit of owners, and expenditures are to be made for the benefit of owners, then this tennis charity event violates these governing documents.

Your enforcement options appear to be to replace the board or use the courts. See FS 190.041 at http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0100-0199/0190/0190.html

CathyA3 (Ohio)
Posts: 6,299

Posted:

I'd be curious what the CDD's insurer has to say about this event, especially since it's an event at which injuries can be expected.

KerryL1 (California)
Posts: 14,550

Posted:

What is a CDD?

LisaR21 (Florida)
Posts: 22

Posted:

A CDD/community development district is a special purpose government that is given taxing authority over the property owner to maintain common areas, neighborhood amenities (pool, Fitmess center, tennis center etc) they also maintain (or are supposed to) stormwater drains. The 5 member Board of Supervisors is elected to 4 year terms much like that of a city council person. In the same our CDD-it seems to be run like a private club with a never ending amount of money than a government agency

LisaR21 (Florida)
Posts: 22

Posted:

LisaR21 (Florida)
Posts: 22

Posted:

Interesting point- it seems the CDD did not collect the revenue for registration fees-third party did that and then wrote a check back to the CDD-the cash collected for raffle tickets and silent auction items reportedly was spent back on expenses. Only problem is there are not yet any receipts for these cash purchases.

LisaR21 (Florida)
Posts: 22

Posted:

Quote:

Posted By CathyA3 on 06/06/2023 7:00 AM
I'd be curious what the CDD's insurer has to say about this event, especially since it's an event at which injuries can be expected.

Good point

LisaR21 (Florida)
Posts: 22

Posted:

Quote:

Posted By ElleN on 06/06/2023 6:27 AM

Did you find in the FL Statutes where exactly it says that the CDD is to be run for the benefit of the property owners?

ElleN (Idaho)
Posts: 4,420

Posted:

Lisa, I said "if."

You are as capable as I of looking at the aforementioned governing documents and checking for restrictions on spending.

I do see that FS 190 requires that proposed budgets be discussed at an open meeting, and objections must be heard. If the charity event is not on there, this is one issue that might have traction.

Ultimately to sort through these issues, you are stuck preparing as best you can and meeting with an attorney.

LisaR21 (Florida)
Posts: 22

Posted:

Quote:

Posted By ElleN on 06/06/2023 12:54 PM
Lisa, I said "if."

You are as capable as I of looking at the aforementioned governing documents and checking for restrictions on spending.

I do see that FS 190 requires that proposed budgets be discussed at an open meeting, and objections must be heard. If the charity event is not on there, this is one issue that might have traction.

Ultimately to sort through these issues, you are stuck preparing as best you can and meeting with an attorney.

Thank you Ellen. I had looked and thought you may have seen something I missed. The CDD attorney is well aware that our tax dollars go to this. Same attorney that did not seem to be concerned about thousands of dollars in gift cards being purchased as a tax free employee benefit. It would seem a traditional bonus may be more appropriate- and better documented. No record of which employees received these gift cards.

ElleN (Idaho)
Posts: 4,420

Posted:

CathyA3's approach makes a lot of sense. Is there a way to communicate with the insurer (that does not put a target on your back)?

LisaR21 (Florida)
Posts: 22

Posted:

Quote:

Posted By ElleN on 06/06/2023 3:54 PM
CathyA3's approach makes a lot of sense. Is there a way to communicate with the insurer (that does not put a target on your back)?

I already have a target on my back. I raised the issue about a year ago that our tennis center has lost a million dollars in the past 4 years while another CDD managed Tennis Center of similar size (about 20 minutes away) loses zero dollars every year and actuallly make 5 or 10 grand back. overall it just appears to be a lot of waste and a lack of accountability. Since our CDD annual tax is the highest in the county at well over $4,000.00 a year with another proposed increase it seems that all the professionals we pay to “manage” could at least guide with reasonableness.

KerryL1 (California)
Posts: 14,550

Posted:

I know this does' help you, LisaR, and I guess all of our other posters know how a CDD relates to your HOA. I'm curious, so if it doesn't involve much of your time, can you explain?

KerryL1 (California)
Posts: 14,550

Posted:

I know this doesn't help you, LisaR, and I guess all of our other posters know how a CDD relates to your HOA. I'm curious, so if it doesn't involve much of your time, can you explain the relationship ?

LisaR21 (Florida)
Posts: 22

Posted:

Quote:

Posted By KerryL1 on 06/06/2023 6:01 PM
I know this does' help you, LisaR, and I guess all of our other posters know how a CDD relates to your HOA. I'm curious, so if it doesn't involve much of your time, can you explain?

The Cdd, or community development district is a special taxing authority/special purpose government entiry—just for property owners in a given neighborhood- the extra tax money goes towards landscaping the common areas, maintenance of the 1 recreation pool area, fitness center, lap pool and tennis facility, stormwater management. On the other side is our POA which only governs Architectural review and covenant enforcement. The POA budget is about 250k annuallly and the dues are $165 annually. Versus The annual budget for the CDD is about 5 million for the 1600 homes, condos. Owners pay a fee which depends on the area in the neighborhood they live- from 2 to 4kish. The 5 member CDD board is elected in staggered 4 year terms on the general election ballot. The CDD is required to follow Florida Sunshine laws.

LoriM15 (Florida)
Posts: 1,009

Posted:

We own a condo here in Florida where there is a CDD (gates, roads, stormwater, a little other infrastructure), a master HOA (pools, tennis club, clubhouse, other amenities) and a condo HOA. The CDD cost is paid in county tax bill. The master and condo fees are billed quarterly. They all coordinate somehow but are managed by three different management companies and sometimes there are conflicts (one condo amenity has an agreement that it can be used by everyone, but cannot be reserved or used for gatherings, but master HOA was approving gatherings there).

CDDs are an advantage to the developer because the development fees the county charges are not paid up front by the developer, they are passed along to the owners after purchase. So part of the CDD "taxes" are paying for infrastructure that in the old days the developer would have already paid for.

I just want to point out that giving employees gift cards as a bonus or year-end gift is extremely common. It's because if you give them money through the property management company, you have to "gross up" and pay the management fee and taxes on top of the amount you want to give. Most management companies advise you to give gift cards. I'm not saying it's right - but it does happen all the time and it does save the association quite a bit of money.

LisaR21 (Florida)
Posts: 22

Posted:

Quote:

Posted By LoriM15 on 06/07/2023 7:28 AM
We own a condo here in Florida where there is a CDD (gates, roads, stormwater, a little other infrastructure), a master HOA (pools, tennis club, clubhouse, other amenities) and a condo HOA. The CDD cost is paid in county tax bill. The master and condo fees are billed quarterly. They all coordinate somehow but are managed by three different management companies and sometimes there are conflicts (one condo amenity has an agreement that it can be used by everyone, but cannot be reserved or used for gatherings, but master HOA was approving gatherings there).

CDDs are an advantage to the developer because the development fees the county charges are not paid up front by the developer, they are passed along to the owners after purchase. So part of the CDD "taxes" are paying for infrastructure that in the old days the developer would have already paid for.

I just want to point out that giving employees gift cards as a bonus or year-end gift is extremely common. It's because if you give them money through the property management company, you have to "gross up" and pay the management fee and taxes on top of the amount you want to give. Most management companies advise you to give gift cards. I'm not saying it's right - but it does happen all the time and it does save the association quite a bit of money.

The employees that reportedly a given the grocery and gas gift cards are not employees of the management company they are employees of the CDD. The 2 management company employees oversee the 50 or so CDD employees. It is the management company employees who have bought gift cards. The manager of the CDD would also routinely buy supplies like pool furniture ma other business expenses on her personal credit card and ask to be reimbursed versus using a CDD issued credit card.

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