About Community Development Districts (CDDs)
Community Development Districts (CDDs)
A CDD is a governmental unit created to serve the long-term specific needs of its community. Created pursuant to Chapter 190 of the Florida Statutes, a CDD’s main powers are to plan, finance, construct, operate and maintain community-wide infrastructure and services specifically for the benefit of its residents.
What will the CDD Do?
Through a CDD, the community can offer its residents a broad range of community-related services and infrastructure to help ensure the highest quality of life possible. CDD responsibilities within our community include storm water management, street paving and maintenance, sewer and wastewater management, and street lights.
How CDDs Operate
A CDD is governed by its Board of Supervisors which is elected initially by the landowners, then begins transitioning to residents of the CDD after six years of operation. The Montecito CDD is completely transitioned to residents. Like 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. Public hearings are held on CDD assessments and the CDD’s budget is subject to annual independent audit.
Relationship with the Homeowners Association
The CDD and HOA responsibilities differ in that the Homeowners Association is responsible for maintaining and enforcing all of the covenants, conditions, and restrictions related to use of homeowner’s property in Montecito. Any planned new construction, additions, or exterior modification to existing structures or landscaping must first be reviewed and approved in writing by the Homeowners Association, whose members are appointed by the HOA Board.
Benefits to Residents
Residents within a community with a CDD may expect to receive three major classes of benefits. First, the CDD provides landowners consistently high levels of public facilities and services managed and financed through self-imposed fees and assessments. Second, the CDD ensures that these community development facilities and services are maintained at a proper level. Third, CDD residents elect the Board of Supervisors, which is able to determine the type, quality and expense of CDD facilities and services.
Other savings 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, the same as cities and counties. Many contracts for goods and services, such as annually negotiated maintenance contracts, are subject to publicly advertised competitive bidding.
The CDD sets the standards of quality in the community. The CDD provides perpetual maintenance of the environmental conservation areas. This consistent and quality-controlled method of management helps protect the long term property values in a community.
The Cost of a CDD
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 and may consist of two parts—an annual assessment for operations and maintenance, which can fluctuate up and down from year to year based on the budget adopted for that fiscal year—and an annual capital assessment to repay bonds sold by the CDD to finance community infrastructure and facilities, which annual assessments are generally fixed for the term of the bonds. Because costs and services vary depending upon the individual CDD, specific fee information is available for each community.
The CDD makes it possible for our community to offer the most desirable elements of a master-planned community. Residents enjoy high quality infrastructure facilities and services with the comfort and assurance of knowing that the standards of the community will be maintained long after the developer is gone. With a CDD in place, residents are assured of the ability to control quality and value for years to come.