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CDD Fact Sheet

Community development district (CDDs) were created under the Uniform Community Development Act of 1980, Chapter 190 of the Florida Statutes, as amended.  The Act established that CDDs could provide a valid option for financing, constructing and maintaining community or subdivision infrastructure improvements.  A CDD is organized as a special-purpose unit of local government and operates as an independent taxing district.

Because a CDD is an independent special district, its governing body establishes its own budget and operates independently of the local governmental entity within the scope of its specific and very limited powers.  A CDD does not have police powers and cannot regulate land use or issue development orders; those powers reside with the local general-purpose government (city or county).

The primary function of a CDD is to issue tax-exempt bonds to construct subdivision infrastructure, e. g. , road, water and sewer lines, recreational facilities, etc.  Thus, new growth within a CDD pays for itself and the cost of the growth is allocated proportionately by levying special assessments on the landowners who receive the benefits.  A CDD also provides a stable and reliable platform for self governance of the maintenance and operation of the facilities constructed when those facilities are retained by the District.  

A CDD provides the developer with an efficient mechanism to finance front-end capital expenditures at a lower interest rate and usually on a non-recourse basis, while maintaining control of the district for a period of years that extends beyond the build-out of the development.  A CDD also provides a more efficient method of paying the operation and maintenance expense of subdivision infrastructure and related services.

For the local general-purpose government, the creation of a CDD results in an expansion of the tax base and additional general fund revenues. Because of the structure and limited powers of a CDD, as defined in the enabling legislation, the comprehensive planning effort is also enhanced.

Furthermore, Florida law has provisions which guard against the proliferation, duplication and fragmentation of municipal or county services by providing mechanisms for termination, annexation, or transfer of all or part of the CDD services to the affected county or municipality.