Community Facilities District
History of Community Facilities Districts (CFD)
In 1982, the Mello-Roos Community Facilities Act of 1982 (Government Code 53311-53368.3) was created to provide an alternate method of financing needed improvements and services. These Community Facilities Districts (CFDs) seek public financing through the sale of bonds for the purpose of financing public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks, and police protection to newly developing areas. The special property tax paid by the property owners is used to make the payments of principal and interest on the bonds.
A CFD is created by a sponsoring local government agency. The proposed district will include all properties that will benefit from the improvements to be constructed or the services to be provided. A CFD cannot be formed without a two-thirds majority vote of residents living within the proposed boundaries. Once approved, a special tax lien is placed against each property within the CFD.
Rancho California Water District is the lead agency of several CFDs that were formed to finance the construction of certain public facilities and the payment of water connection fees. These CFDs include:
- Community Facilities District No. 99-1 A and B of the Rancho California Water District (CFD 99-1 A and B)
- Community Facilities District No. 99-2 of the Rancho California Water District (CFD 99-2)
- Community Facilities District No. 89-5 of the Rancho California Water District (CFD 89-5)
The bonds are only payable from the annual special tax levied and collected through the county of Riverside from property owners located within the Community Facilities District. In the event that the special taxes are not paid when due, any shortfall to pay debt service will be paid from the amounts held in the bond reserve funds or from proceeds, if any, from foreclosure sales of land within the Community Facilities Districts following a delinquency in a special tax payment. The CFD has the right and the obligation to foreclose on property when special taxes are delinquent for more than 90 days. Neither the faith, credit, nor the taxing power of the Rancho California Water District, the state of California, or any other political subdivision thereof is pledged to the payment of these bonds. Therefore, the Community Facilities Districts are considered separate reporting entities.
The Community Facility Districts are administered by David Taussig and Associates at:
5000 Birch Street
Newport Beach, CA 92660
Jerry Wen is the Senior Associate and can be contacted at 949-955-1500.