History of Community Facilities District
In 1978, Proposition 13 was enacted by Californians, which limited the ability of many public agencies to finance new projects by limiting the tax rate on real estate to 1%, changing the value on property to their 1975 value and limiting the annual increase in value to 2% (except for a change in ownership). General Obligation Bond passage cannot fill the funding gap. Although General Obligation Bonds continued to be passed at the State and local levels, the need for funding could not be filled by this source of funds as Californians began to ask for new growth to pay for itself. In 1982, Senator Henry Mello and Assemblyman Mike Roos spearheaded the passage of the “Mello-Roos Community Facilities District Act of 1982.” This Act authorized local governments and developers to create Community Facilities Districts (CFDs) for the purpose of selling tax-exempt bonds to fund public improvements and collect revenues to pay for public improvements. Also authorized is the collection of revenue to fund services and maintenance.
Sequence of Events
The typical timeline for the formation of a CFD is approximately 6 months. Every project is different and may contain circumstances that change the sequence of events for formation of a Community Facilities District. With that disclaimer in mind, consider that the key step in the timing of any Mello-Roos proceedings is producing all required documents during the application process. The time to get necessary information can take anywhere from a few days to a few years.
For more information, please see the sequence of events.