ISSUE:Review and approval of a Tee Time and Trail Pass Services Agreement between the Village Center Community Development District, Sumter Landing Community Development District and the multiple other owners of golf courses in The Villages identified as: VLS, VOC, VLC, VLOC, VDC, VDOC.  

ANALYSIS/INFORMATION:

Currently The Villages of Lake-Sumter, Inc. (VLS)  and the Sumter Landing Community Development District (SLCDD) entered into an Amended and Restated Agreement for Services and Collateral Assignment of Amenities Fee from Future Residences, made effective November 16, 2016.  Section 3. C of the Services agreement sets forth the rights and obligations of VLS and SLCDD with regards to the provision of golf tee time reservation services and Section 4.A of the Services agreement sets forth the rights and obligations of VLS and SLCDD with regards to issuance and honoring of trail passes.  At this time, the parties wish to establish certainty, continuity and a fair-cost sharing methodology in the provision of Reservation Services and issuance of Trail Passes.

As such, Section 3.C referencing Golf Tee Time Reservation Services was valid for 5 years, terminating on November 16, 2021, which has necessitated the need for a new agreement to be established.  Also, since 2016, the development has continued to grow and has many new owners associated with the ownership of golf courses which the current agreement did not contemplate.  Thus the Village Center Community Development District (VCCDD) was not a party to this agreement and there is a need to formalize the agreement and new allocation methodology of cost and revenue earned.

Residents enjoy the right to utilize any amenity, which includes golf, no matter who owns the golf course and thus any trail fee purchased can be used at any Executive golf course regardless of ownership or location.

In an effort to equitably allocate trail fee revenue, the new agreement will utilize an allocation methodology of trail pass proportionate share.  This methodology will be based on the number of each party’s golf course holes, divided by the total number of golf course holes played for each month.  This creates a fair and equitable allocation where previously it was just based on ownership of courses.  In addition, there will no longer be a discount applied to trail fees based on the purchase of a priority membership.  Thus, all trail fee revenue will be allocated based on the trail pass proportionate share methodology.

This agreement also provides for a consistent application of rates for residents which include the annual, six-month and monthly Trail Passes, daily golf fees, elimination of the priority member trail pass discount, and timing of seasonal rates.  Furthermore, to ensure that rates remain commensurate with the cost of service delivery, the Parties agree that they shall work together in good faith to establish a uniform charge for Trail Passes, together with annual increases thereto equal to the cumulative change in the Consumer Price Index for All Urban Consumers over the twelve-month period that is between three and fifteen months prior to the annual increase. 

By recommending approval of this agreement, Staff will present the Amended and Restated Chapter IV Rate Rule to the committee, inclusive of these changes, for recommendation of approval and formal adoption by the Village Center Community Development District.

In addition, the reservation services fee, where all tee times will be made for all residents, will be charged based on the same methodology of tee times booked.  The initial total cost of the system will be $220,000, paid by all parties based on their proportionate share of tee times booked.  The trail pass website will also be hosted for a cost of $7,200, paid by all parties based on their proportionate share as previously outlined.

Based on tee times booked/hole played in 2019-2020, the Recreation Amenities Division (RAD) would be allocated approximately 20% of all fees and receive concurrently 20% of all revenue.  In addition, based on the 2019-2020 statistics, the cost for RAD would be approximately $45,440 while receiving an additional approximately $320,000.

Prior to the development of the Tee Time Trail Pass Services Agreement, the VCCDD included $51,548 in the FY 2021-22 Budget for bank related charges for RAD owned executive golf courses.  Following final approval and implementation of this agreement and the new allocation structure, the VCCDD will be able to use pertinent available funds budgeted to offset the cost of service in the first year.  In subsequent years, the budget will be developed in accordance with the allocation methodology of trail pass proportionate share included in the Tee Tim Trail Pass Services Agreement.