Why a Community Facilities District?
The method of the collection of annual special taxes through the formation of a Community Facilities District (CFD) is used not only by school districts; but by cities, counties and other governmental agencies in California. Local funding generated by CFDs is an important component of the District's overall facilities program. CFD is a financing mechanism provided by the District to developers to fund developer fees that are imposed on new residential and commercial/industrial development. In return, the District receives funds greater than those it would have received if developer fees were collected at the time that building permits were issued- in most cases, the District receives 120% of the Level 2 Fee amount (currently at $4.05 per square foot) through the CFD.
How do CFDs help our schools?
Funding from the CFD is used to finance Facilities within the boundaries of the CFD to accommodate students generated from the new residential development. To be clear, accommodating does not always translate in to a new school being built. Rather, the CFD funds are used at the school district sees fit to most efficiently serve the new students whether via an existing, or new, school facility. Examples of ways funds from CFDs are used by school districts to accommodate students are: purchase, construction, expansion, improvement, rehabilitation of school facilities.
How does it affect me as a homeowner?
When the formation of a CFD is proposed by a district, city, county, etc., qualified electors (landowners) within the boundaries of the CFD to be formed hold a special tax election. In this election, a two-thirds vote must be received approving the levying of the special tax. This tax, if approved, will create revenue to finance facilities and/or services within that CFD. The revenue from this tax can be used to pay directly for facilities and/or services, and/or pay debt service from bonds or other debt for which the proceeds are used for financing facilities within the CFD. These taxes are calculated based upon the annual special tax rate determined for each property category (i.e. developed property, approved property, undeveloped property, etc.) and is secured by a continuing lien and levied annually against non-exempt real property within the district.