What CDD stands for is Community Development District Fee. The developer can added the cost of the infrastructure, (electrical, roads, sewer systems, sidewalks, play grounds, community pools, tennis courts, water parks, etc.) into the cost of each home site. It will increase the cost of the house. To avoid this now the developers usually put the cost of all of that into a BOND, the CDD. The bond charge is usually apportioned to the size of each home site.
The bond is payable for the improvements over a period of usually 30 years. The cost of maintaining these improvements goes on in perpetuity, yeah forever! The CDD bond is paid off in 30 years buy not the maintenance on the improvements. Usually in this case the streets themselves are private, not public streets. And, sometimes there are no amenities, just the roads, electrical, cable and sewer.
CDD fees are divided into two parts: The Capital Bond Assessment is the repayment portion of the loan, and The Operations and Maintenance Assessment is for operations and maintenances of the common area amenities (i.e., pools, parks, trails, tennis courts, and main club house). Also most people mistakenly think this is a tax and is tax deductible. The bill for the CDD is sent with the tax bill, but is a bond and technically NOT tax deductible.
At the point when a certain percentage of the community is owned by the homeowners and not the developer, the neighbors will run the CDD and not the developers. This gives the homeowners more control of their community, like a Homeowners Association, but will not really change any liability to the CDD itself. The cost of the bond is also usually adjustable, so it is NOT a fixed cost. It may increase or decrease.
There are 600 Community Development Districts in Florida, 438 of which were begun in 2003 through 2008. They have issued $6.5 billion in municipal bonds to finance their infrastructure.
Florida Statute 190.003 Definitions of a CDD.
–Ad valorem taxes levied on real and tangible personal property and which are generally referred to as general obligation bonds.
(2) “Assessable improvements” means, without limitation, any and all public improvements and community facilities that the district is empowered to provide in accordance with this act.
(3) “Assessment bonds” means special obligations of the district which are payable solely from proceeds of the special assessments levied for an assessable project.
(4) “Board” or “board of supervisors” means the governing board of the district or, if such board has been abolished, the board, body, or commission succeeding to the principal functions thereof or to whom the powers given to the board by this act have been given by law.
(5) “Bond” includes “certificate,” and the provisions which are applicable to bonds are equally applicable to certificates. The term “bond” includes any general obligation bond, assessment bond, refunding bond, revenue bond, and other such obligation in the nature of a bond as is provided for in this act, as the case may be.
(6) “Community development district” means a local unit of special-purpose government which is created pursuant to this act and limited to the performance of those specialized functions authorized by this act; the boundaries of which are contained wholly within a single county; the governing head of which is a body created, organized, and constituted and authorized to function specifically as prescribed in this act for the delivery of urban community development services; and the formation, powers, governing body, operation, duration, accountability, requirements for disclosure, and termination of which are as required by general law.
(7) “Cost,” when used with reference to any project, includes, but is not limited to:
(a) The expenses of determining the feasibility or practicability of acquisition, construction, or reconstruction.
(b) The cost of surveys, estimates, plans, and specifications.
(c) The cost of improvements.
(d) Engineering, fiscal, and legal expenses and charges.
(e) The cost of all labor, materials, machinery, and equipment.
(f) The cost of all lands, properties, rights, easements, and franchises acquired.
(g) Financing charges.
(h) The creation of initial reserve and debt service funds.
(i) Working capital.
(j) Interest charges incurred or estimated to be incurred on money borrowed prior to and during construction and acquisition and for such reasonable period of time after completion of construction or acquisition as the board may determine.
(k) The cost of issuance of bonds pursuant to this act, including advertisements and printing.
(l) The cost of any election held pursuant to this act and all other expenses of issuance of bonds.
(m) The discount, if any, on the sale or exchange of bonds.
(n) Administrative expenses.
(o) Such other expenses as may be necessary or incidental to the acquisition, construction, or reconstruction of any project or to the financing thereof, or to the development of any lands within the district.
(p) Payments, contributions, dedications, and any other exactions required as a condition to receive any government approval or permit necessary to accomplish any district purpose.
(8) “District” means the community development district.
(9) “District manager” means the manager of the district.
(10) “District roads” means highways, streets, roads, alleys, sidewalks, landscaping, storm drains, bridges, and thoroughfares of all kinds and descriptions.
(11) “Elector” means a landowner or qualified elector.
(12) “General obligation bonds” means bonds which are secured by, or provide for their payment by, the pledge, in addition to those special taxes levied for their discharge and such other sources as may be provided for their payment or pledged as security under the resolution authorizing their issuance, of the full faith and credit and taxing power of the district and for payment of which recourse may be had against the general fund of the district.
(13) “Landowner” means the owner of a freehold estate as appears by the deed record, including a trustee, a private corporation, and an owner of a condominium unit; it does not include a reversioner, remainderman, mortgagee, or any governmental entity, who shall not be counted and need not be notified of proceedings under this act. Landowner shall also mean the owner of a ground lease from a governmental entity, which leasehold interest has a remaining term, excluding all renewal options, in excess of 50 years.
(14) “Local general-purpose government” means a county, municipality, or consolidated city-county government.
(15) “Project” means any development, improvement, property, utility, facility, works, enterprise, or service now existing or hereafter undertaken or established under the provisions of this act.
(16) “Qualified elector” means any person at least 18 years of age who is a citizen of the United States, a legal resident of Florida and of the district, and who registers to vote with the supervisor of elections in the county in which the district land is located.
(17) “Refunding bonds” means bonds issued to refinance outstanding bonds of any type and the interest and redemption premium thereon. Refunding bonds shall be issuable and payable in the same manner as the refinanced bonds, except that no approval by the electorate shall be required unless required by the State Constitution.
(18) “Revenue bonds” means obligations of the district which are payable from revenues derived from sources other than ad valorem taxes on real or tangible personal property and which do not pledge the property, credit, or general tax revenue of the district.
(19) “Sewer system” means any plant, system, facility, or property, and additions, extensions, and improvements thereto at any future time constructed or acquired as part thereof, useful or necessary or having the present capacity for future use in connection with the collection, treatment, purification, or disposal of sewage, including, without limitation, industrial wastes resulting from any process of industry, manufacture, trade, or business or from the development of any natural resource. Without limiting the generality of the foregoing, the term “sewer system” includes treatment plants, pumping stations, lift stations, valves, force mains, intercepting sewers, laterals, pressure lines, mains, and all necessary appurtenances and equipment; all sewer mains, laterals, and other devices for the reception and collection of sewage from premises connected therewith; and all real and personal property and any interest therein, rights, easements, and franchises of any nature relating to any such system and necessary or convenient for operation thereof.
(20) “Water management and control facilities” means any lakes, canals, ditches, reservoirs, dams, levees, sluiceways, floodways, pumping stations, or any other works, structures, or facilities for the conservation, control, development, utilization, and disposal of water, and any purposes appurtenant, necessary, or incidental thereto. The term “water management and control facilities” includes all real and personal property and any interest therein, rights, easements, and franchises of any nature relating to any such water management and control facilities or necessary or convenient for the acquisition, construction, reconstruction, operation, or maintenance thereof.
(21) “Water system” means any plant, system, facility, or property and additions, extensions, and improvements thereto at any future time constructed or acquired as part thereof, useful or necessary or having the present capacity for future use in connection with the development of sources, treatment, or purification and distribution of water. Without limiting the generality of the foregoing, the term “water system” includes dams, reservoirs, storage, tanks, mains, lines, valves, pumping stations, laterals, and pipes for the purpose of carrying water to the premises connected with such system, and all rights, easements, and franchises of any nature relating to any such system and necessary or convenient for the operation thereof.
