CDD 101

Baytree CDD December 4, 2019

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WELCOME TO CDD 101

Overview of CDDs
Benefits of CDDS
Establishment
Financing
Assessments
Elections & Turnover
Reporting Requirements
Public Records, Sunshine Laws & Ethics

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Overview of Community Development Districts

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What is a Community Development District?

 Local unit of special purpose government
 Established under the Uniform Community Development Act of 1980 (Chapter 190,
F.S.)
 Provides a mechanism to finance, construct and maintain high quality improvements and amenities
 Separate from, and NOT an arm of, the County or City

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What Can a Community Development District Do?

A CDD’s powers are generally derived from Sections 190.011 and 190.012, Florida Statutes.

CDD have several broad powers for a special district:
Sue and be sued
Contract for services
Borrow money & issue bonds
Adopt rules
Maintain an office
Eminent domain
Charge fees
Levy, collect & enforce special assessments
Exercise all the powers necessary, convenient, incidental, or proper in connection with any of the powers, duties, or purposes authorized by this act.

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What Can a Community Development District Do?

Pursuant to Section 190.012(1), a CDD can finance, construct and acquire the following improvements:
Water management and control structures
Water supply, sewer, and wastewater management, reclamation, and reuse
Bridges or culverts
Roadways; street lights; alleys; landscaping; hardscaping; and the undergrounding of electric utility lines
Buses, trolleys, transit shelters, ridesharing facilities and services, parking improvements, and related signage
Environmental investigation and remediation costs
Conservation areas, mitigation areas, and wildlife habitat
Any other project within or without the boundaries of a district pursuant to a development order or interlocal agreement
Any other project, facility, or service required by a development approval, interlocal agreement, zoning condition, or permit issued by a governmental authority with jurisdiction in the district

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health importance.
Waste collection and disposal.

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 Control and elimination of mosquitoes and other arthropods of public

district boundaries.

government agencies for an increased level of such services within the

police power, but may contract with the appropriate local general-purpose

proper governmental agencies; except that the district may not exercise any

be leased, sold, or donated to the school district, for use in the educational system when authorized by the district school board.
Security, including, but not limited to, guardhouses, fences and gates, electronic intrusion-detection systems, and patrol cars, when authorized by

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 School buildings and related structures and site improvements, which may

fire trucks, and other vehicles and equipment.

Parks and facilities for indoor and outdoor recreational, cultural, and educational uses.
Fire prevention and control, including fire stations, water mains and plugs,

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 Pursuant to Section 190.012(2), a CDD can obtain these certain additional powers:

What Can a Community Development District Do?

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What a Community Development District Can Not Do

 A CDD is a limited purpose unit of special government, with limited powers.

 A CDD cannot take any action which is inconsistent with the comprehensive plans, ordinances and regulations of the City/County.

 A CDD does not have the power to adopt its own comprehensive plan, building code or land development code – it is not a zoning authority.

 All of the CDD’s powers must comply with all applicable City/County laws, rules, regulations, and policies governing planning and permitting of the development.

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Benefits of CDDs

 Developers/builders have increasing demands placed on them by cities and counties to provide infrastructure

 CDDs provide access to less expensive infrastructure through tax exempt financing

 The CDD debt is secured by assessments and the CDD can foreclose on those assessments b/c the assessments are liens on the land (i.e., non-recourse debt)

 Spread infrastructure costs over time, as opposed to building all costs into home up front

 CDDs therefore have a more stable stream of revenue b/c the assessments are paid along with property taxes

 Allows CDD to handle procurement of contracts and development of public works

 Allows for enhanced amenity levels and recreation options making community more attractive and livable – allows homeowners to ultimately determine their own level of service

 CDDs are long term maintenance entities, which provide for stable, long term property values

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CDDs v. HOA/POA

 Governmental entity
 Sunshine Laws / Open Records / Sovereign Immunity / Eminent Domain / Public Accounting
 Issues tax exempt bonds
 High quality infrastructure and amenities
 Revenue collection and enforcement
 Public procurement
 Typically no architectural review
 Elected Board of Supervisors – turnover period differs

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	CDD COMMUNITY	NON-CDD COMMUNITY (HOA OR POA)	
Access/Records	Public (budgets, audits, contracts, minutes etc)	Private	
Accountability	More public accountability to County/City, DEO, Auditor General and bondholders	Much less accountability	
Hurricane Recovery	More self sustaining	Less self sustaining	
Self Reliant Maintenance	Ability to refinance, maintain; less reliant on County/City, because of bankable nature of entity	Lesser abilities, more likely to need County/City assistance	
Environmental	Preferred entity for storm-water and habitat maintenance by Water
Management District	Less preferred entity	
Turnover to Homeowners	Guaranteed turnover in 6 years (250 voters residing in project)	Longer turnover period often at 80- 90% build out	
Assurance of Funding	Funding for improvements and amenities assured, held in trust on day one by independent trustee	Funding for improvements dependent on project revenues, held privately	

CDDs v/ HOA/POA

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Establishment

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Considerations for Establishment

Nature of project (location, size, type, land ownership, etc.)
Timing and delivery of improvements
Private v. public infrastructure
Need to finance off-site improvements
Numerous other considerations

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special-district government.

6. Whether the area that will be served by the district is amenable to separate

development services and facilities.

incompatible with the capacity and uses of existing local and regional community

5. Whether the community development services and facilities of the district will be

functional interrelated community.
4. Whether the district is the best alternative available for delivering community development services and facilities to the area that will be served by the district.

sufficiently compact, and is sufficiently contiguous to be developable as one

3. Whether the area of land within the proposed district is of sufficient size, is

government comprehensive plan.

element or portion of the state comprehensive plan or of the effective local

2. Whether the establishment of the district is inconsistent with any applicable

and correct.

1. Whether all statements contained within the petition have been found to be true

community development district:

making a determination to grant or deny a petition for the establishment of a

The City/County is responsible for considering the following factors and

Establishment Criteria

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Process for Establishment

Districts over 1000 acres in size are established at the state level via administrative rulemaking.
Districts less than 1000 acres are established by ordinance of the city or county where the land is located.
Criteria for establishment and contents of the petition are identical. In both cases, a local hearing must be held in the vicinity of the proposed CDD. No referendum required.
In all cases, consent of 100% of the landowners is required for establishment.

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CDD Financing

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Process

 PART 1 – Levy Assessments
 Prepare a capital improvement plan
 Prepare an assessment methodology report
 Notice & Hearing

 PART 2 – Bond Validation
 PART 3 – Bond Issuance

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Financing Parties

District Manager
District Engineer
District Counsel
Financial Advisor
Investment Banker
Bond Counsel

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Key Developer Financing Documents

Acquisition Agreement
Construction Funding Agreement
Completion Agreement
True-Up Agreement
Continuing Disclosure Agreement

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Special Assessments

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Special Assessments

Special Assessments
First priority liens, co-equal with taxes
On-roll v. off-roll collection methods

There are two requirements for the imposition of a valid special assessment
The property assessed must derive a special benefit from the service provided.
The special assessment must be fairly and reasonably apportioned among the properties that receive the special benefit.

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Debt Special Assessments

 Process
 Improvement Plan / Methodology
 Hearing
 Notice (Lender’s perspective)

 Methodology
 Benefit
 Fairly & Reasonably Allocated
 Per Unit v. EAUs

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O&M Special Assessments

Adopted in connection with annual budget
Used to pay for administrative costs and costs of operating and maintaining District improvements
Process similar to debt service
– No cap on increases, but notice may be required
Methodology typically follows debt assessment methodology

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Elections & Turnover

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How are CDDs governed?

 Board of Supervisors – 5 Members
 Early years, landowner elections
 Majority of acreage / units control
 After 6 years (depending on size, etc.), resident electors begin to gain seats
 Can’t be removed (absent abuse)

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Reporting Requirements

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What are the CDD’s Reporting Requirements?

 Must follow all applicable procedural and reporting rules required of municipal governments under Florida Statutes including:
 Elections
 Bidding and awarding of contracts
 Advertising of meetings and holding meetings in the“Sunshine”
 Preparation and distribution of minutes to appropriate governmental agencies
 Maintenance of official records
 Reporting and filing of financial information
 Must establish and administer internal accounting controls
 Must disclose to potential landowners the existence of the CDD and the amount of the special assessments levied by the CDD for both debt service and operation and maintenance

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CDD Disclosures

Notice of Establishment
Notice of Special Assessments (common practice)
Sales Contracts – Meeting Requirement of FS 190.048
Disclosure of Public Financing
Bond Market Disclosures / Continuing Disclosure Agreement Obligations
Audits; filings with DEO

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Public Records, Sunshine & Ethics Laws

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business by any agency.

law or ordinance or in connection with the transaction of official

characteristics, or means of transmission, made or received pursuant to

software, or other material, regardless of the physical form,

books, tapes, photographs, films, sound recordings, data processing

 “Public records” means all documents, papers, letters, emails, maps,

very broadly:

Florida Statutes implement this right and define “public record”

or persons acting on their behalf…” Art. 1, §24(a), Fla. Const. The

the official business of any public body, officer or employee of the state,

of access to “any public record made or received in connection with

Florida’s Constitution provides that citizens have a Constitutional right

Similarly, Supervisors are subject to Florida’s Public Records laws.

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 The Sunshine Law is set forth in Chapter 286.011, Florida Statutes, and contains the following three basic requirements:
 Meetings of public boards must be open to the public;
 The public must have reasonable public notice of all such meetings; and
 Minutes must be taken at all such meetings.

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 Florida’s ethics laws governing public officials also apply to CDD Supervisors, and include both prohibitions and disclosure obligations

 Prohibitions:
 Don’t use public office for personal gain or benefit
 Don’t vote on measures that would benefit your private gain, or the private gain of an employer, relative or relative's employer (EXCEPTION though for landowner seats)
 Don’t accept or solicit gifts (on your behalf or on behalf of family) for a vote
 Don’t disclose or use information not available to the general public that was obtained because of your official position
 Don’t employ, appoint, promote or advance relatives into a position in the CDD
 Don’t do business with the CDD

 Disclosures
 Statement of Financial Interests
 Voting Conflicts – must be filed by a special district local officer when they abstain from voting on measures that: (1) inures to his or her special private gain or loss; (2) inures to the special gain or loss of a principal by whom he or she is retained; (3) could result in special private gain or loss to a relative; (4) could result in special private gain or loss to a business associate.
 Gifts – Disclose any gift worth more than $100 from someone who is not a relative

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Baytree Community Development District
Capital Improvements, Ownership and Maintenance
FY 20 Assessment Levels
CDD FY 2019 Accomplishments

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Capital Improvements, Maintenance, and Ownership

All Common Area Infrastructure
Security
Recreation
Roads/Sidewalks
Lakes
Landscaping

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Assessment Type	FY 2020 Assessment	
Operations and Maintenance	$1,884.67/home	

Assessment Levels

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Baytree CDD Accomplishments
- 2019

 Recreation
 Finished and opened Pavilion – Joint Funded with BCA
 Removed Old Playground
 Repaved Recreation Parking Lot
 Refurbished Tennis Courts – awnings, nets, fence, and benches
 Approved landscape cleanup – awaiting dry season
 Installed Additional Cameras
 Approved New Gate Access System

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Baytree CDD Accomplishments
- 2019

 Security
 Increased guard wages – DSI Contract
 Expanded TekWave Rollout and Information

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Baytree CDD Accomplishments
- 2019

 Landscaping
 Re-landscaped front entrance including removal of shrubs and adding palms
 Installed median fountain

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Baytree CDD Accomplishments
- 2019

 Monuments
 Expanded Holiday decorations – with BCA
 Modernized front entrance with stone
 Replaced lighting with LEDs
 Upgraded electrical systems throughout community for more reliable service

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Baytree CDD Accomplishments
- 2019

 Roads
 FPL replaced leased streetlights with LEDs
 Painted CDD owned poles/streetsigns
 Authorized paving National Drive and adding speedshumps
 Reviewed micro-surfacing for future savings
 Re-striped crossings and intersections
 Repaired sidewalks

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Baytree CDD Accomplishments
- 2019

 Financial
 Held Assessments level in FY 2020

 Lakes
 Annual Lake Bank Restoration

 General
 Agreed to hold an annual night meeting
 Two strategic planning workshops

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Questions?

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