Rivercrest Community Development District: What you should know

History of Special Taxing Districts in Florida

Early Floridians realized that the transportation needs for a growing territory could be managed by Special Districts with vested powers. During this time, the legislature authorized the creation of the first Special District with the Road, Highway, and Ferry Act of 1822.

By the 1920s Special Districts were created to finance large engineering projects in response to an explosion in the state’s population. Some of these districts are still in existence today, such as Florida Inland Navigation District, created in 1927.

After World War II, the baby boom and Florida’s growing popularity created the need for yet even more numerous and diverse Special Districts.

Districts created since then were involved in, among others, aviation, juvenile welfare, housing, fire control and prevention, research and development, security, beach preservation, water management, and transportation.

In 1975, the State addressed management requirements promulgated by continued growth with the New Communities Act, Chapter 163, Part IV, Florida Statues. This act created the first independent Special Districts for community development.

In response to new state comprehensive planning legislation, the Florida Legislation passed the Uniform Community Development Act of 1980, otherwise known as Chapter 190, Florida Statutes. The act recognized that there was a need for uniform, focused, and fair procedures in state law that would provide a reasonable alternative for establishment, power, operation, and duration of independent districts, effectively managing and financing basic community development services.

Special Districts provide a solution to the state’s planning, management, and financing needs for delivery of capital infrastructure in order to service projected growth without overburdening other governments and their taxpayers.

Today Special Districts are the most numerous and diverse group of local governments in this state as well as the country. In 2002, there were estimated to be over 36,000 Special Districts.

As of October 1, 2004, there were 1,264 Special Districts in Florida, 282 of which were Community Development Districts.

Overview of Community Development Districts

A CDD is a governmental unit created to serve the long-term specific needs of its community. Created pursuant to Chapter 190, Florida Statues, a CDD’s main powers are to plan, finance, construct, operate and maintain community-wide infrastructure and services specifically for the benefit of the District.

What will the CDD do?

Through a CDD, the District can offer its residents a broad range of community-related services and infrastructure to help ensure the highest quality of life possible. Responsibilities of a CDD may include storm water management, potable and non-potable water supply, sewer and wastewater management, landscaping, street lighting, and recreational amenities.

A CDD is governed by its Board of Supervisors. A District Board is elected initially by the landowners, eventually transitioning to residents of the CDD after six to eight years of operation, depending on the district. Similar to all municipal, county, state, and national elections, the Office of the Supervisor of Elections oversees the vote, and CDD Supervisors are subject to state ethics and financial disclosure laws.

The CDD's business is conducted in the “Sunshine,” which means all meetings and records are open to the public. Although meetings are open to the public, they are not considered public hearings. Public hearings are held at specific times throughout the year on CDD assessments; the purpose of a CDD meeting is to conduct business of the District.

Community Development Districts compliment the responsibilities of a community home owner’s association (HOA). A CDD typically provides and maintains public facilities and infrastructure for a community whereas a HOA is effective in the coordination and management of privately held properties within the district or community. Therefore, many of the maintenance functions handled by CDDs in other communities may be handled by these associations provided these facilities are either owned by the HOA or agreements exist between the HOA and CDD regarding the maintenance of said facilities. However, the associations have other key responsibilities including the enforcement of the deed restrictions and other quality standards regarding privately held properties. For example, a CDD may contract with the Master Home Owners Association of a community to perform maintance functions.

Residents within a CDD may expect to receive three major classes of benefits:

1. The CDD may provide landowners with higher levels of public facilities and services managed and financed through self-imposed fees and assessments.
2. The CDD ensures that these community development facilities and services will be completed concurrently with other parts of the development.
3. The CDD landowners and electors choose the Board of Supervisors, which is able to determine the levels of service of CDD facilities.

Other similarities are realized because a CDD is subject to the same laws and regulations that apply to other government entities. The CDD is able to borrow money to finance its facilities at lower, tax-exempt interest rates, similar to cities and counties. Additionally, many contracts for goods and services, including annually negotiated maintenance contracts, are subject to publicly advertised competitive bidding.

Landowners and subsequently the five member elected CDD Board sets the standards of quality within a District. For example, a CDD can provide perpetual maintenance of environmental conservation areas within a community. This consistent, quality-controlled method of management ultimately helps protect the long term property values in a community.

The cost to operate a CDD is borne by those who benefit from its services. Property owners in the CDD are subject to a non-ad valorem assessment, which appears on their annual property tax bill from the county tax collector as a CDD assessment. This bulk assessment consists of two parts – an annual assessment for operations and maintenance, which can fluctuate from year to year – and an annual capital assessment to repay bonds sold by the CDD to finance community infrastructure and facilities. Annual capital assessments are generally fixed and do not vary for the term of the bonds. Because cost and levels of services vary depending upon the needs of an individual CDD, the operations and maintenance assessment will vary within each District year to year.

The CDD issues Bonds to finance community infrastructure. Generally, CDDs assess each property owner a yearly capital debt service assessment to pay back those bonds.

In addition, to maintain the facilities of the community and administer the CDD, the CDD conducts a public hearing each year where it adopts an Operating and Maintenance budget. The funding of this budget is levied as an Operating and Maintenance assessment on individual properties by the Board of Supervisors. All residents pay for a share of the maintenance of the CDD Improvements through this annual assessment.

A CDD may provide the following publicly owned elements:

• Off-site roadway improvements, street signage and/or street lighting
• Water management, (including but not limited to main line irrigation, lake and pond construction, and water control structures
• Conservation areas
• Water and sewer facilities, which may be transferred to the appropriate franchised utility or municipality with jurisdiction responsibility
• Landscaping and entry features

Questions Regarding the Role of the Board of Supervisors

A Community Development District has a Board-Manager form of government with the Board formulating public policy and the Manager carrying it out. The Board consists of five members called Supervisors. The Board serves as the governing body of the District and sets public policies implemented by staff. Based upon board consideration these Supervisors may receive compensation or reimbursement for their participation in Board activities.

Initially Supervisors are appointed by the landowners in the formative petition filed with the local government entity. Later they are elected by the landowners and appointed to various terms of office based on the number of votes cast, either two or four year terms. Eventually, within six to eight years of establishment, Board members are elected by State registered voters that reside in the district in a general election conducted by the Office of the Supervisor of Elections in that county.

The Board receives its power form Chapter 190, Florida Statues, which governs community development districts. The Board is responsible for the everyday operation and the future of the district and its residents. A summary of these duties includes, but is not limited to the following:

• Complete all forms required by the State of Florida as a Public Officer
• Comply to and understand the Sunshine Amendment and Code of Ethics for Public Officers
• Governing of the District, its staff, residents and facilities
• The annual budget and financing of the district, including, operations and maintenance fees and general oversight of the District
• Holding and attending board meetings for the District
• Maintaining the current standing of the district up to code and compliance with the State of Florida and other local governmental entities
• Planning for the future growth and maintenance of the District

Initial Supervisors appointed by a landowner are in office for 90 days until a landowner election can be noticed and held. After the initial landowner election is held, the two supervisors with the highest votes serve a four year term; the remaining supervisors serve two year terms. All supervisors elected at the six year period receive four year terms. This eventually this will result in every member on the board serving a staggered four year term.

If a Supervisor resigns his/her office mid term, the board will accept their letter of resignation and then appoint a new Supervisor to serve the remaining term. However, should it be a board consisting of terms elected after the sixth year, the board will only be able to appoint a qualified voter registered in the State of Florida that resides in the district to serve the balance of the term. The resigning supervisor must complete the required forms as per the State within 60 days of departure of office and return them to the Supervisor of Elections office in the county in which they reside.

Community Development District Staff Positions

The District Manager acts as the “City Manager/County Administrator” of the District and works with the elected Board of Supervisors to serve the District and its residents. The direct responsibilities of the District Manager include the following but are not limited to: preserving and maintaining district improvements and facilities, overseeing and coordinating the planning, financing, purchasing, staffing, and compliance of the district, and any other such duties, as prescribed by the board.

The District Counsel acts as the chief legal counsel to the district and is responsible for ensuring that the district conducts its business according to the legal standards placed upon it, both by the actions of the District/Board and Statute.

In this capacity, the District Counsel reviews all district documents, including resolutions, contracts, and agreements, assists District manager in drafting of same and negotiations on behave of the district. Counsel ensures compliance with all necessary laws including the Sunshine Amendment, and assists with securing public financing.

The District Engineer provides professional and technical services to the district to support the planning, design, permitting, construction, financing, and operation and maintenance of the district infrastructure.

The District Engineer also provides the Engineer’s Report for bond financing, and can provide direct consultation for such items as: bidding, contractor selection standards, master planning of infrastructure and construction phase observation.