CDD vs HOA
A community development district is a special purpose form of local government described as an “independent special taxing district” and as such is “public” and responsible for the communities “common areas.” A homeowner’s association is a “not for profit corporation” which is made up of “members” or homeowners, within a specific geographic boundary and it is considered “private”.
A community development district may own and operate the community center facilities, storm water drainage system, parks, roads, and the entry features and landscaping. The homeowners’ association typically oversees the “Deed Restriction” enforcement and design control of the association. Each of these entities is distinctly different and operated at “arm’s length” of each other.
The HOA and CDD are independent of each other but may from time to time enter into agreements that are beneficial to both parties. This varies from community to community.
WHAT IS A CDD? IT’S FUNCTION ETC…
The Arbor Greene Community Development District (CDD) was created pursuant to the provisions of Florida State Statute Chapter 190 in 1996. The CDD functions as any local government and is governed by 5 elected Supervisors (4-year terms) who administer the operation of the entity along with a contracted Community Management Company (currently, Inframark Infrastructure Management Services) and a Community Manager. Districts have similar powers as other local governments, with the exception of “police powers”. Therefore, it cannot have its own police department, building, zoning and compliance codes, etc. This would also include “Deed Restrictions” which is why community development districts normally have homeowners’ associations organized within its boundaries.
The CDD provides for general oversight and management of the district “common areas” including but not limited to: Community Center (meeting facilities, swimming pools, fitness & weight rooms, tennis courts and a park), roads, storm water management systems, contracted vendors, 8 district parks, ponds, and wetland areas. The Fiscal Year of the CDD is October 1st – September 30th.
The district is an “independent special taxing district” and therefore is not “dependent” on the next level of local general-purpose government, for funding, governance, etc. Standard municipal grade services are delivered to the residents by way of the county and paid by the way of their real estate tax bill and its ad valorem portion. The District’s operation is funded by way of non-ad valorem assessments on an owner’s real estate tax bill. The District itself is tax exempt for most of its property with the exception of property that may be income producing.
DESCRIPTION OF BONDS
Florida Statue Chapter 190 allowed the developer to finance the costs of the “common areas” through tax-free municipal bonds. Bonds are basically a type of loan. Those “loans” are repaid by the property owners in the community over a fixed-period of time (like a mortgage), with each property charged an annual amount. The advantage is the property purchaser gets to pay for the capital facilities over time at a typically lower interest rate than a mortgage, rather than as a part of the purchase price of the home. The amount (Annual Debt Assessment) is a part of the Non-Ad Valorem Tax on the homeowners’ tax bill each year and is collected by the County Tax Collector. The balance of the Non-Ad Valorem Tax for the CDD is the Budget for continued Operations and Maintenance (O&M) of the community common areas. The bond portion has an end date similar to a mortgage. Once the bond is paid off, it leaves only the O&M portion to pay each year. This does not necessarily mean that the total annual assessment will go down as the need for O&M may go up with the need to repair/replace aging infrastructure including but not limited to: roads, facility roofs, pools, parks, pond banks, storm water management systems, and sidewalks.
The principal balance of debt placed on the land/lot(s) may be paid off at any time by the owner of the land/lot(s). The exact pay off amount may be received by contacting the district’s office.
DOES THE CDD EVER GO AWAY?
As many believe, the District does not cease to exist or go away when its bonds have paid off. The District may continue to exist for perpetuity. It may be dissolved by way of several events, such as merger with another community development district, or the local general-purpose government takes over all the ownership of a district’s facilities and financial responsibilities.
THE ELECTION PROCESS
From its initial establishment until after its sixth year in existence, the board of supervisors is elected by way of a “landowner” election, wherein, all landowners of the district may participate and are entitles to one vote per acre or fraction thereof. By statue, there are five supervisors, no more or less.
There are no specific requirements for candidates to meet during the landowner election phase. Candidates may be whoever is placed into candidacy and can obtain enough votes to take a seat. After the sixth year as long as there are more than 250 “qualified electors” (registered voters) who reside within the confines of the district, the elections begin a transition.
At the next election after the sixth-year mark with the prerequisite minimum number of registered voters (250), two of the three seats up for election, are held through the “general election” process by the Supervisor or Elections of the County. Candidates must be registered voters residing within the confines of the district and who have met the criteria of being a candidate on the ballot. Land ownership is not a requirement.
Candidates run for a “seat” number such as Seat 1 or Seat 2, etc. In the first general election both seats are a four-year term. The remaining position is still elected by way of landowner election and is a four-year seat as described by statute.
There are certain criteria and filing requirements for general election candidates, including but not limited to the filing of a financial disclosure form, known as From 1, Statement of Financial Interests. In brief this form outlines the source of a candidates’ income and business interests. In addition, there are filing fees, declaring of a campaign treasury, etc. These details are best addressed by contacting the County Supervisor of Elections Office.
In the eighth year after establishment and thereafter (as long as 250 registered voters continue to exist), all candidates must be registered voters, residing within the confines of the district. Once again, there are no land ownership requirements. Those seats are also 4-year seats.