SANTA ANA, California. On November 23, Orange County’s Board of Supervisors passed an ordinance to create the Community Facility District (CFD) – an additional tax on property owners to fund nearby infrastructure projects and other services – in Rancho Mission Viejo, California, which received up to $ 165 million in debt and authorizing a special tax collection.
“Moving forward is great,” Supervisor Lisa Bartlett said during the meeting.
Bartlett said that only residents within CFDs at Rancho Mission Viejo are responsible for a special tax levy.
“These are not all Orange County taxpayers,” she said.
Local governments typically form CFDs to provide annually funded public services such as police and disaster protection, recreation and city services. They are also intended for capital projects such as public parks, schools, libraries, kindergartens and infrastructure.
In the case of Rancho Mission Viejo, the bond aims to improve urban infrastructure such as roads, bridges and storm water, with an estimated cost of $ 91 million, according to a county report (pdf).
Other funding goes to the Santa Margarita Ranch Water Area ($ 40.5 million), the Capistrano Unified School District ($ 3.3 million) and the Orange County Fire Department ($ 3 million), plus an additional $ 6 million in utilities and drainage pool.
John Morlach, a former Orange County inspector and California Senator, said he has always opposed land planning for CFDs.
“Argument [for CFDs] is that the price of the house will be lower due to higher annual property taxes, ”Morlach told The Epoch Times.
The introduction of CFDs in the new community allows the developer to opt out of paying collateral, Morlach said. “This is a methodology for subsidizing developers. This is not bad. “
However, according to Morlach, these shortcomings potentially create additional administrative burdens, higher taxes and fines if the property owner does not pay tax.
According to the decision, the issued bonds are to be redeemed for no more than 30 years and cannot exceed an 8% interest rate.
The next step to address this issue will require a two-thirds majority vote among residents and property owners to create the CFD.