Bischoff files amended complaint against HISID as illegal exaction class action suit, but offers temporary remedy settlement; Table Rock Landing also to offer settlement
HOLIDAY ISLAND -- David Bischoff, the Holiday Island property owner who filed suit against HISID last year over the legality of the Assessment of Benefits done in 2011, filed an amended complaint Friday, making it an illegal exaction class action suit on behalf of all Holiday Island property owners.
This was done prior to a public meeting to discuss settlement offers this coming Monday evening with the Board of Commissioners.
The BOC will also discuss a settlement offer by Table Rock Landing Time Share Association in its suit against HISID, also over the AOB and other matters.
The Bischoff amended complaint states essentially that HISID continued to levy and collect assessments in excess of the assessed benefits and interest over many years. If HISID had actually properly applied those payments to the remaining AOB, the AOB would have been "extinguished" at the latest in 1998, and HISID would have no legal authority to continue to levy assessments after that.
The suit also contends that HISID's sewer plant debt fee, security fee, water tower fee and separate amenities fees are all illegal because they were done without property owners' agreement or ability to appeal for an adjustment, and they were not applied to the remaining AOB.
Further, some monies collected have not gone toward the improvements permitted by SID statute but have gone into an undesignated reserve fund to provide HISID a "cushion" in violation of state law, the suit contends. Assessment revenue has been used for "illegal expenditures" that violate the SID statute, the suit said, such as marketing, the deputy contract, and other expenses.
The suit also states that the 2011, and any prior AOB, that assessed properties differently by zoning classification was illegal and that levies cannot be set based on usage of the improvements but only on the benefits that accrue to the real property. Property owners were not given an opportunity to object or ask for adjustments, the suit states.
The "settlement framework" proposed in a letter by Bischoff's attorney, Tim Hutchinson of Reece Moore Pendergraft LLP of Fayetteville, suggests that "all past levies be disregarded" and that each lot will be assigned an arbitrary dollar amount in the total applied AOB to "give HISID the cushion it needs in order to continue to levy AOBs for the next few years."
But after that, something will need to be worked out to allow HISID legally to continue to levy assessments at all.
Hutchinson wrote the settlement framework is being proposed by Bischoff "to avoid the devastating consequences that would result from a Plaintiff's verdict if this matter should go to trial and because my client feels it is not in the best interest of the class of taxpayers he represents for HISID to immediately be estopped from collecting any further revenues."
TRL's settlement offer awards a declaratory judgment by the court that the timeshares will be charged an R-1 rate from 2012 on. If HISID agrees, TRL will not seek reimbursement of assessments paid in excess of this prior to 2011 or any of the assessment paid in 2011 if TRL does not have to pay for amenities used by timeshare owners free of charge in 2011.
The offer also includes free use of the golf and recreation center for timeshare owners and their families for three years starting this year and that timeshare owners can purchase activity cards at property owner rates after that.
The offer requires timeshare owners to be considered full property owners with the same rights and privileges as others, that their taxes are not delinquent for 2011 and 2012, that they will be charged property owner rates for amenities and that TRL's 2012 assessment payment be accepted as paid in full.
The settlement offer also wants voting rights in commissioner elections, with 56 ballots to be cast by the TRL board. This represents two ballots per timeshare unit.
The HISID board's settlement discussion and possible vote will take place this Monday, Jan. 28, at 6 p.m. in the Clubhouse ballroom. The public is welcome to attend.