District counsel is warning that a lawsuit could be imminent if Community Development District 7 follows through on a threat to withhold money from the Project Wide Advisory Committee.
Last month, CDD 7 supervisors debated the possibility of withholding $1.292 million, its share of the $14 million 2020-21 PWAC budget. CDD 7 supervisors are worried about climbing costs and the unbridled growth of The Villages south of State Road 44.
In a memo released Thursday afternoon, District Counsel Mark Brionez spelled out the potential legal fallout from CDD 7’s threatened withholding of funds from PWAC.
Brionez pointed out that CDD 7, along with CDDs 5 through 13, last year signed an intergovernmental agreement in which it pledged to be part of PWAC, which is aimed at sharing the costs of infrastructure, including multi-modal paths, landscaping and retention bonds. CDD 7 supervisors have long bristled under PWAC and past threats have led to this standoff. CDD 7 will soon be called upon to finalize its 2020-21 budget, which is funded by maintenance assessment fees paid by residents.
“In short, District 7 is bound by the PWAC agreement and may not remove itself from the agreement without obtaining the mutual consent of the parties to the agreement. District 7 is not required by statute to adopt the budget as presented but it is required to adopt a budget. The District may modify the proposed budget to exclude or add budget line items including removing the PWAC budget line item. However, the District should exercise extreme caution in declining to allocate funding to meet its obligations under the PWAC agreement as in doing so, the District may find itself in breach of contract if it is unable to pay for its proportionate share under the PWAC agreement,” Brionez wrote in the memo.
Brionez also warned that if it does not fund the PWAC budget, CDD 7 could be sued by the Sumter Landing Community Development District, the Developer-controlled body that has absolute authority over PWAC, which is made up of resident-elected Villagers from CDDs 5 through 13.
“While SLCDD does not control District 7’s budgeting process, it is clear that the failure to budget for the contribution to the Project Wide fund expresses an intent to abandon District 7’s duties under the Interlocal (agreement) to the detriment to SLCDD and every other numbered district in the project,” SLCDD attorney Lewis Stone said.
He is warning CDD 7 to “make provision for paying invoices as they come due.”
If CDD 7 does not fund the PWAC line item, the other CDDs could be called upon to make up the difference.
