Can CDD Fees Increase? Here’s How and Why

Community Development District (CDD) fees are a specific type of non-ad valorem assessment applied to properties within designated districts. These fees help fund the infrastructure and services for new or developing communities, such as roads, utilities, and recreational amenities.

Understanding CDD Fee Structure

CDD fees have two parts: a debt service assessment and an operations and maintenance (O&M) assessment. The debt service portion is allocated to repay the bonds that the CDD issued to finance the initial development of infrastructure. This can include major components like roadways, water and sewer systems, and community amenities such as parks and clubhouses. This assessment is generally a fixed amount over a specific period, tied to the bond repayment schedule.

The Operations and Maintenance (O&M) assessment covers the ongoing costs associated with managing and preserving the district’s facilities and services. These expenses include items such as landscaping, common area upkeep, utility costs for shared spaces, and administrative overhead. Unlike the debt service, the O&M assessment can fluctuate annually based on the district’s budgetary needs and the actual costs of providing these services. Both components are typically collected as part of the annual property tax bill.

Factors Driving Fee Adjustments

The debt service portion, while generally fixed, can be impacted by events such as bond refinancing. A CDD might refinance its outstanding bonds to secure a lower interest rate, which could potentially decrease the annual debt service assessment for property owners. Alternatively, refinancing could extend the repayment period, influencing the total amount paid over time.

Additional, one-time special assessments may also be levied for specific capital projects that were not covered by the original bond issuance. These include unexpected repairs or new amenities. For the Operations and Maintenance (O&M) assessment, several factors directly influence annual adjustments. Inflation, with rising costs for labor, materials, and utilities, increases maintenance expenses.

Expansion of services or amenities within the district, such as the addition of new recreational facilities or enhanced landscaping, will also lead to higher O&M costs. Aging infrastructure also requires increased expenses for repairs and replacements. The CDD Board of Supervisors reviews annual budgetary needs, taking into account these cost drivers, to determine the appropriate O&M assessment required to sustain the district’s standards and services.

The Process of Fee Modification

Adjustments to Community Development District fees follow a structured, public process, typically occurring annually. The CDD Board of Supervisors initiates an annual budgeting cycle to project the district’s financial needs for the upcoming fiscal year. This process involves drafting a preliminary budget that outlines anticipated revenues and expenditures for both debt service and operations and maintenance.

Public hearings are required where proposed fee adjustments are presented. Property owners are encouraged to attend these meetings to review the budget, ask questions, and provide input on the proposed assessment rates.

These public discussions ensure that community members have an opportunity to understand and comment on the financial decisions impacting their properties. Following the public hearings, the CDD Board of Supervisors formally votes on and approves the final budget and the corresponding assessment rates. Property owners are typically notified of any changes to their CDD fees through official communications, often included with their annual property tax bills or via direct mail notices.

Accessing CDD Fee Information

Property owners can find current and historical information about Community Development District fees. The most common method is to review the annual county property tax bill, where CDD fees are typically listed as non-ad valorem assessments. This bill provides a breakdown of the amounts charged for both debt service and operations and maintenance components.

Another reliable source is the official website of the specific Community Development District. These websites often publish detailed budgets, meeting minutes from public hearings, and schedules of assessment rates. Many county property appraiser or tax collector websites also offer online tools where property owners can search for specific parcel information, which may include details on associated CDD assessments. For more detailed financial records or historical data, property owners can typically submit public records requests to the CDD, as these districts operate with public transparency requirements.