CDD, HROA, HOA’S: Who Controls What and Why

Harmony has welcomed a large number of new residents over the past few years, many of whom have come to Florida from another state. For these new residents, a Community Development District (CDD) can be quite a mystery. In fact, during both the June and July meetings of the CDD Board, the question has been asked, “What is the CDD?”, “Who created the CDD?”, and “How are the CDD assessments used?” So, below are the answers to these questions with some history.

Historically and even now in most other states, if a developer wants to start a new development he would have to pay upfront, either with his own money or the money from investor, to put in all the streets, alleys, sidewalks, landscaping, stormwater pipes and ponds, street lights, electrical service, water and sewer pipes, conservation areas, and any recreational amenities (all these things are also known as infrastructure). Since those development costs were paid upfront, the developer and/ or investors would recoup their costs when the individual lots were sold; in other words, the original price of the lot included that lot’s share of the development cost.

However, in 1975 things changed when the Florida Legislature adopted the New Communities Act. The intent of this Act was to better control development in Florida and to prevent duplication of services when new communities were put in place. This New Communities Act allowed the development of special taxing districts throughout Florida. However, this Act did not work as intended, so in 1980, Florida’s legislature passed the Uniform Community Development District Act which revised The New Communities Act. Despite the good intentions of both of these laws, what was actually created was a vehicle that allowed developers to fund their developments’ infrastructure by issuing bonds that would be paid off, not by the developer as the lots were sold, but instead by the new property owners over the next 30 years. The Community Development District, which was intended to provide new home and business owners with a method of funding and maintaining the infrastructure that supported their homes and businesses to the standards the community set, turned into a way for developers to double dip, getting paid for infrastructure costs both through the bond proceeds and also through the sale price of the original lots/structures. The bond money that was expected to be passed on to the community was consumed by the developer and little to none of the initial bond proceeds were left by the time the CDD governance was handed over to the residents of the community.

Despite this result, Florida has allowed CDDs to proliferate. Although having to pay off a bond over 30 years is a downside, there is also an upside to living in a CDD. Other neighborhoods or developments that are not CDDs have their infrastructure turned over to the county or city that they are located in. When this hap- pens, the non-CDD community has to compete with other prior development for maintenance services and they have to accept the maintenance standards set by that county or city. Under the structure of the CDD, Harmony can set its own standards for maintenance, repair, and replacement of its landscaping, recreational facilities, stormwater system, and other infrastructure. The residents and only the residents of Harmony elect the five members of the Board of Supervisors during the regular elections and candidates for these seats are subject to the same campaign laws as are county, sity, and state elected officials. The CDD Supervisors are responsible for setting the CDD budget and policies for Harmony, while the District Manager, the District Engineer, and the District Legal Counsel are responsible for the day to day operations of the CDD. The CDD structure is similar to that of a small city or a village, governance closest to the people and on a small scale.

Just like a small city or village, the CDD levies assessments on the properties within its boundaries to pay for the operation and maintenance of the community infrastructure. This assessment is in addition to the assessment that pays for the original development bond. Both assessments are collected by Osceola County on your property tax bill and passed through to the CDD. The use of this collection method assures the collection of the assessments and failure to pay will result in a tax lien against the property.

Harmony’s Board of Supervisors meets monthly and is subject to all the rules and requirements that govern city and county elected boards. All of the CDD records are public records and are available upon request from our District Management firm, Inframark by calling Sandra DeMarco at 954-603-0033 ext 40532. The CDD has a website (HarmonyCDD. org) that contains valuable information including meeting agendas and minutes, financial records, announcements, contact information, and a link to the boat reservation system. The CDD also has an email address (cddmaintenance@inframark.com) that residents can use to report CDD facilities that need maintenance or repair.

What does the Harmony CDD Control?

The Harmony CDD owns and controls all the common area property within the CDD boundary. This includes the alleys, most sidewalks and verges, most of the Highway 192 frontage, the median at the east entrance, the parks and recreation areas, the docks and boats, the boardwalks, the Swim Club and Ashley Park pools and bathhouses, the lakefront, the basketball and volleyball courts, the playgrounds (except the one within Ashley Park), the common landscaped areas, the stormwater ponds that are not in the golf course, the linear walking trail around the golf course, the community garden parcel, and over 200 acres of conservation areas. Although we own these properties, we do not have land use or law enforcement authority over these properties, as the legislature has reserved those powers for the County.

The Harmony CDD has no authority or control over any private property within the Harmony boundaries. The master HROA and the other HOAs enforce the community/neighborhood standards on homeowner properties while the County Code Enforcement Board enforces the County standards on the commercial/industrial properties. The CDD has no control over the roads, the golf course, the clubhouse, the gym, or the other commercial and undeveloped properties within the CDD boundary.

Hopefully, this information will help in understanding the role and responsibilities of the CDD. If you have further questions, you can reach out to any of the CDD Supervisors or the District Manager. Contact information for the CDD, the HROA and other important agencies can be found on page 1 of this magazine.

As always, please email any or all of your CDD Supervisors with your thoughts, concerns, or ideas on how to improve Harmony. Our community is better when we all work together. The emails for the Supervisors are Kerul@harmonycdd.org, Dan@harmonycdd.org, Lucas@harmonycdd.org, Jo@harmonycdd.org, and Teresa@harmonycdd.org n

By Kim Kirsch Insurance Broker / District Manager, Healthcare Solutions Team