A CDD is a way for a developer to create a new community and pass on the costs of infrastructure, roads, sewers, utility systems to the home buyers. It guarantees to the homebuyers that the infrastructure will be consistently maintained as well as being installed to the highest standard levels throughout the whole community. Generally the CDD has two portions. One portion lasts the lifetime of the home and pays for the care and upkeep of the infrastructure, this passes from owner to owner. This portion may fluctuate from year to year, depending on the budget adopted for that fiscal year. The second part is a Bond that is usually for 30 years and covers the initial expenditure of installing all the infrastructure. The CDD responsibilities may include storm water management, potable and irrigation water supply and streetlights.
According to Florida management company Wrathell, Hunt and Associates, LLC, a CDD is governed by its Board of Supervisors consisting of five members. Initially, Board Members are elected by property owners and usually composed of representatives of the developer. Thereafter, the Board of Supervisors is elected by the majority vote of the electors within the CDD. Like all elections, the Office of the Supervisor of Elections oversees the vote and CDD Supervisors are subject to state ethics and financial disclosure laws.
A CDD may be authorized to exercise special powers to plan, establish, acquire or reconstruct, enlarge, equip, operate and maintain additional systems and facilities for security. These could be guardhouses, fences and gates, patrol cars and intrusion detection systems. The CDD may not exercise any police power, but may contract with the appropriate local general-purpose government agencies for an increased level of services within the CDD boundaries.
The cost to operate a CDD is paid for by the residents who benefit from its services. It is listed as a “Non-Ad Valorem” assessment on the annual property tax bill from the county tax collector.
A CDD provides the solution to Florida’s need to provide valuable community infrastructure generated by growth, ultimately without overburdening other governments and their taxpaying residents. It ensures that residents of a master-planned community have high quality infrastructure facilities and services, and by extension guard the quality and value of their homes for year to come.