Money Matters [continued] the developed land is typically owed by the developer who is wellincentivized to support the new tax or assessment. The creation of this type of funding is often a condition of development approval. Fees and charges All agencies can impose fees for full cost recovery for many of their direct costs, legally referred to as regulatory fees. These fees do not require a balloting, but must be well supported, typically with a cost-of-service study. The fee rates must not exceed the costs of the service. Common examples are inspection fees, plan review fees, and swimming pool use fees, etc.
CFDs and landscaping and lighting districts Similarly, special districts in areas with new development should consider implementing an annual special tax (typically a Community Facilities District, also known as a “CFD” or “Mello Roos”) or a benefit assessment (typically a Landscaping and Lighting Benefit Assessment District) on all new development to pay for additional maintenance of district facilities associated with new development. This requires the creation of a supporting study. A landowner balloting is required, but
Note that water and wastewater agencies often generate their primary revenue from property-related fees, typically referred to as water-rates and sewer rates. Although these rate increases do not require a balloting, they do expend political capital, and now require sophisticated outreach as discussed above.
4. Grants Federal, State, and other grants should be evaluated as a portion of a district’s funding portfolio. However, grants are time consuming and competitive to win, and often come with limitations on use. Also, it is very difficult to develop long term financial plans based upon grant funding.
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5. Community wide special tax / benefit assessments The most commonly known funding mechanism is the community-wide, balloted special tax or benefit assessment. These mechanisms can generate the most significant amount of revenue, but require community wide balloting approval. They require 66.6+ percent voter support for a special tax and 50+ percent weighted property owner support for a benefit assessment. Most importantly, they also often require public opinion polling, considerable community outreach, and come with the possibility of failure. In other words, the first four portfolio approaches should be fully utilized before embarking on a community wide balloting.
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For more information, be sure to check out the upcoming webinar Beef Up Your Bottom Line: A How-To-Do-It Webinar for Special Districts With Revenue Needs - April 4, 2017 and the workshop Beyond the Basics: Comprehensive Strategies for Successfully Implementing Funding for California Special Districts - May 24, 2017 in Sacramento. Visit www.csda.net to register.
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