What is a CFD Special Tax?

A CFD special tax is levied on taxable property within a district area that is used to fund authorized public facilities and/or services.

When did the use of CFD's start? 

Finding funding for local public facilities and services is very difficult.  Particularly after the passage of Proposition 13 in 1978, cities and counties were severely limited in their ability to finance such things as parks, infrastructure, and police and fire services.  Senator Henry Mello and Assemblyman Mike Roos proposed the Mello-Roos Community Facilities Act of 1982 (California Government Code §53311), which gave California local governments access to community funding with the requirement that two-thirds of the voters or landowners in the proposed district must approve the special tax. 

How does a CFD special tax work?

                                                                                                            Do CFD special taxes have a maximum amount?

 

                                                      Do CFD maximum special taxes increase?

                                                        Does a CFD special tax decrease?

                                                When does the CFD special tax expire?

When and how are the CFD special taxes collected?

                                                What happens if I don’t pay my property tax bill on time?

Who do I contact with any questions related to maintenance CFDs?

Special taxes for a CFD are typically levied annually and are placed on the property tax bill issued by the County.  The special taxes for CFDs created to finance authorized maintenance and services are levied to pay for the service provided (such as lighting, landscaping, police protection, fire suppression, and maintenance of parks and trails, etc.).

All CFDs have maximum special tax amounts which cannot be exceeded. However, the amount of the special tax levied in a given year may be less than the maximum special tax rate.  The amount of special taxes levied may fluctuate from year to year; however, they cannot exceed their annual maximum amount.  Due to the fact that the annual CFD special taxes levied on a particular piece of property could be below the maximum special tax rate for that property, a potential buyer or seller of property should not rely on the amount shown on the property tax bill for disclosure purposes.

Typically, the maximum special taxes for CFDs that pay for ongoing services shall be increased annually based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%).

Property owners may be charged less than the maximum special tax or less than the prior year’s special tax depending on the revenue needs of the district.

CFD special taxes that fund ongoing services such as street lighting, traffic signals, landscaping, police protection, fire suppression, or the maintenance of parks and trails do not have an expiration date and can be levied in perpetuity.

Special taxes are usually collected by the Riverside County Tax Collector as part of your property tax bill.  The special tax is generally itemized under “Fixed Charge Assmts” on your tax bill.  Under certain circumstances the County can elect to bill the property owners directly. 

CFD special taxes are subject to the same penalties and interest that apply to regular property taxes.  

Leni Zarate • 951-955-3212 • lzarate@rivco.org