Supervisors approve Community Facilities District for Rocking K South by Carla Blackwell
The Pima County Board of Supervisors on January 17th voted 5-0 to approve a Community Facilities District for the Rocking K South residential development on the southeast side of the metropolitan area. Community Facilities Districts, more commonly used by municipalities, are a means for financing infrastructure for developments, such as roads and water and sewer lines.
The state Legislature extended the authorization to create CFDs to counties in the mid-2000s; however, this is the first time the county has created one as new construction rebounds from the development downturn caused by the Great Recession.
Typically, infrastructure needs for new residential development are funded up front by developers via conventional financing, which are then passed on to consumers through the price of the home. CFDs are a means for the developer to recoup its cost from a property tax rather than the cost of the home. Community Facilities District go to the bond market and sell general obligation bonds to raise the funds to purchase the infrastructure from the developer. The bonds are then paid off through the property tax revenue.
This funding system allows homebuilders to set a lower price since the infrastructure costs are repaid over time rather than all at once through property sales. The number of bonds are limited to the amount that can be supported by the assessed value of the property. A small amount is dedicated to the maintenance of infrastructure.
CFDs are legal entities and the county, even though overseeing the district, is not liable for the infrastructure costs, or for the debt.
The 2,000-acre Rocking K South development is planned for about 3,600 housing units, plus commercial development, parks, and open space. The development company is an affiliate of Diamond Ventures.
Pima County Development Services Department oversees Pima Prospers, the county’s comprehensive plan for growth and development. Pima Prospers contains goals and policies to encourage planned development and explore financing methods to recover the cost of new facilities in a fair manner. Development funding systems such as CFDs promote growth paying for itself