Property owners should demand accountability of excess CDD fees

Article Courtesy of The  Tampa Bay Times
By Mike Fasano, Guest Columnist
Published September 3, 2016


A community development district is a statutorily allowed entity, which is created by a local government — county or municipality — to manage and control the development of a community.

The CDD, which is under the control of the developer for the first six years of its existence, can make decisions regarding everything from water management to transportation to land conservation. By the end of the six-year period, the developer of the community must transition control of the CDD to the residents who reside within its boundaries. A development district may also have a homeowners association, which primarily deals with deed restriction issues. The two generally operate independently of each another.

In many instances, the CDD is fully responsible not only for levying fees on the residents for the provision of services, but also for collection of the same. Many CDDs in Florida find themselves in financial straits because they do not have the legal support of a governmental entity backing up their fee collection efforts. A viable solution for CDDs to deal with collection problems has been to partner with county tax collector offices.

The tax collector has the same enforcement power it has over other properties on the tax rolls. This virtually guarantees that the district's fees will be paid. This is realized by the tax office's ability to sell tax certificates when property taxes are in default. The enforcement action that can be taken on behalf of a CDD is only one benefit of the partnership. Since all parcels within the district are on the tax roll, owners are able to claim up to the 4 percent discount available to those who pay their taxes prior to the final due date (the discount is determined by predetermined payment dates). Additionally, the district has the potential to receive a portion of any excess fees collected by the tax office.

Community development districts that have interlocal agreements with the tax collector — there are 40 of them in Pasco County — will receive their proportionate share of excess fees for non-ad valorem collections at the end of the fiscal year. The Tax Collector's Office sends the CDD a check for excess fees, as well as suggestions for the CDD to get the word out to the property owners regarding the availability of the refund for distribution to the residents. Excess fees have historically run between $1,000 and $10,000.

Mike Fasano is the Pasco County tax collector.

It has come to my attention that not all community development districts are refunding the excess fees to the property owners who paid them, nor are they disclosing what they are doing with the refunds that are issued. If you live in a community that has not issued you a refund or given you a proper accounting of the fees you pay, then I encourage you to contact your CDD and your management company and demand answers. It should be up to the property owners to decide what to do with the refunds. Because the refunds can be substantial, they may help fund needed projects or improvements the homeowners association may determine are necessary. In any event, it should be the property owners, not the developers, who decide how best to use the money.