The ABCs of CDDs
Posted 04-13-2015 at 09:49 PM by Sunshine Rules
The question often comes up, what is a CDD?
CDD is short for Community Development District.
The primary function of a CDD is to construct and maintain infrastructure for a planned community development (PUD). This infrastructure may include roads, sidewalks, street lights, parks, recreational facilities, jogging trails, stormwater management, water mains, sewer lines, roadside landscaping and other similar items.
A little history on the CDD. It was created in FL in 1980 and there are now over 600 community development districts in this state. Developers like CDDs because they don't have to use their own money up front to pay for all of the development's infrastructure. Local government likes them because it allows developers to increase property values (and the tax base) without cost to the government. For home buyers, developers claim it keeps down the prices of the newly constructed homes because infrastructure costs are deferred.
The theory behind CDDs holds that services and public facilities used by residents and landowners will be available early in the development process, and are controlled by those who use them, and are paid for by self-imposed assessments and fees.
By FL state statute (chapter 720) and under strict guidelines, these CDDs have the right to enter into contracts, can adopt by-laws and rules, can obtain funds by borrowing, can issue bonds and levy assessments, can own property and can sue and be sued. CDDs are subject to the same laws and regulations that apply to other government entities. The CDD can borrow money at the same lower, tax-exempt interest rates that cities and counties have access to. Many of the maintenance contracts of the CDD are negotiated on an annual basis and subject to publicly advertised competitive bidding.
A CDD is governed by its board of supervisors, which is elected initially by the landowners/developers, then begins transitioning to residents of the CDD after six years of operation. Then residential board of supervisors are elected. All board members are subject to state ethics and financial disclosure laws, including sunshine laws. Public hearings are held before annual budgets can be adopted by the CDDs.
Homeowners within a Community Development District will see an annual fee appearing on the property tax bill, which is determined by combining the fixed amount of debt service still owed on that lot (from bond issuance) with the variable amount set by the budget for operations & maintenance. The CDD assessment for the year appears on the property tax bill in the non ad-valorem section. It is usually shown as 2 parts - the bond portion and the O&M (operations & maintenance).
To find out the specifics of a CDD for a particular home, I suggest getting the CDD board's contact information as homeowners do not always know the specifics about the bonds and the debt can change, depending upon the actions of the CDD board of supervisors.
And now you have the ABCs of CDDs.
CDD is short for Community Development District.
The primary function of a CDD is to construct and maintain infrastructure for a planned community development (PUD). This infrastructure may include roads, sidewalks, street lights, parks, recreational facilities, jogging trails, stormwater management, water mains, sewer lines, roadside landscaping and other similar items.
A little history on the CDD. It was created in FL in 1980 and there are now over 600 community development districts in this state. Developers like CDDs because they don't have to use their own money up front to pay for all of the development's infrastructure. Local government likes them because it allows developers to increase property values (and the tax base) without cost to the government. For home buyers, developers claim it keeps down the prices of the newly constructed homes because infrastructure costs are deferred.
The theory behind CDDs holds that services and public facilities used by residents and landowners will be available early in the development process, and are controlled by those who use them, and are paid for by self-imposed assessments and fees.
By FL state statute (chapter 720) and under strict guidelines, these CDDs have the right to enter into contracts, can adopt by-laws and rules, can obtain funds by borrowing, can issue bonds and levy assessments, can own property and can sue and be sued. CDDs are subject to the same laws and regulations that apply to other government entities. The CDD can borrow money at the same lower, tax-exempt interest rates that cities and counties have access to. Many of the maintenance contracts of the CDD are negotiated on an annual basis and subject to publicly advertised competitive bidding.
A CDD is governed by its board of supervisors, which is elected initially by the landowners/developers, then begins transitioning to residents of the CDD after six years of operation. Then residential board of supervisors are elected. All board members are subject to state ethics and financial disclosure laws, including sunshine laws. Public hearings are held before annual budgets can be adopted by the CDDs.
Homeowners within a Community Development District will see an annual fee appearing on the property tax bill, which is determined by combining the fixed amount of debt service still owed on that lot (from bond issuance) with the variable amount set by the budget for operations & maintenance. The CDD assessment for the year appears on the property tax bill in the non ad-valorem section. It is usually shown as 2 parts - the bond portion and the O&M (operations & maintenance).
To find out the specifics of a CDD for a particular home, I suggest getting the CDD board's contact information as homeowners do not always know the specifics about the bonds and the debt can change, depending upon the actions of the CDD board of supervisors.
And now you have the ABCs of CDDs.
