Community Facilities District Formation
The Mello-Roos Community Facilities Act of 1982 authorizes the creation of
community facilities districts (“CFD”) to fund facilities and services. There are
two methods for approval. The first, and most common, is if there are less
than 12 registered voters, a landowner vote is held with one vote per acre
owned. This is a way that new development can fund facilities improvements
attributable to their new development projects. Alternatively, with 12 or more
registered voters, a 2/3 vote of the electorate within the CFD is required. With
a 2/3 vote of the electorate, a CFD can be used to fund additional services that
are not permitted under the landowner vote. Additionally, this law allows the
levy of special taxes and issuance of special tax bonds.
- CFDs fund a wide variety of facilities, fees and services:
- Acquisition of land and facilities
- Construction of facilities and infrastructure
- Furniture & Equipment (5 years useful life)
- Fees and charges on property i.e., mitigation fees
- Public safety services
- Recreational programs (2/3 vote of electorate)
- Maintenance of parks and open space (2/3 vote of electorate)
- Maintenance services for school sites and structures (2/3 vote of
electorate)
- Boundaries are flexible
- Tax formula is flexible
- Special taxes levied on property within the boundaries of the CFD
may be used for debt service on bonds, pay-as-you-go projects, or
services.
The Lockeford Community Services District is the exclusive water and
wastewater provider in Lockeford, a rural community located south of
Sacramento. Capitol PFG assisted the District with the negotiation and
establishment of two community facility districts to serve two new development
projects. The Community Facilities Districts will enable the District to finance
the acquisition and construction of a new reclamation facility without impacting
the District’s existing ratepayers.
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Capitol Public Finance Group, LLC
1900 Point West Way, Ste. 273
Sacramento, CA 95815
T (916) 641-2734
F (916) 921-2734 |
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